The late David Weis, instructed his students during a 2007, trader’s camp sponsored by Dr. Elder, that ‘trades are found at the edge of the lake’.
Most of the training session was recorded and reproduced on DVD. That video is still available, linked here and is a wealth of knowledge.
Within the video, Weis analyzes what he calls ‘The Apache Spring’.
No, it’s not a history lesson of Chato’s raids in New Mexico Territory during the spring of 1882; it’s an analysis of Apache Oil, ticker APA.
That analysis alone, should be enough to convince any rational person, price action has absolutely nothing to do with any fundamentals.
Wyckoff repeated this assessment in his autobiography; ‘prices have an energy of their own.’
Prices are manipulated. They always have been; but it’s not important to know who’s doing the manipulating.
What’s important, is to discern (within probability) the objective of the manipulation.
Which brings us to Oil & Gas, XOP.
We’re at the edge of the lake.
Up-volume is declining and momentum (MACD) has bearishly diverged. If there’s to be a sustained reversal, this location is high probability.
Price action in XOP, is attempting to close the reversal gap. This morning’s pre-market shows it might do that in today’s session.
We’re already short the sector via DUG (not advice, not a recommendation) and watching carefully for gap closure with subsequent continuation of the nascent reversal.
Charts by StockCharts