Options Trade Update

The Put entry on Chevron CVX, was admittedly, late to the party.

From a trading and strategy perspective, when CVX, announced its ‘buy-back‘ program, that was the appropriate time to go short (not advice, not a recommendation).

With that in mind, the Put option detailed in the above link was closed towards the end of yesterday’s session.

Chevron could still collapse from here and that may ultimately be the outcome.

However, before that happens, as shown below, the more probable event is to come back up for a test of underside resistance.

Chevron CVX, 4-Hour

Note how thrust energy (blue arrow) to the downside is dissipating.

The chart below shows a potential outcome, if (and it’s a big if) CVX, is still in a significant reversal.

Examples presented on this site are just that: Examples

They show one “old-timer’s” perspective on the market and current events.

The examples can be used (or not) to aid in understanding market behavior or to show a different perspective on how to approach the current environment.

To paraphrase Dr. Alexander Elder:

‘There are many ways to make money in the markets … and even more ways to lose it’.

It’s about 20-minutes before the open. Let’s see what happens next.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

A Long Way Down

The breakdown in Chevron (CVX) could spell real trouble.

The Oil & Gas Sector has already been covered extensively over the entire month of January.

Prior posts are here, here, here, here, here and here.

Some of the analysis was negated by subsequent price action and some of it not. This is the way of the markets.

However, the main theme was, this sector’s at an extreme, at risk for a major, swift and sustained downturn (not advice, not a recommendation).

Additional data that indicated extremes, including the Chevron (CVX) buy-back are below:

WTI ‘Cushing‘ Build Report

Investors ‘surge‘ back into oil.

Events like this, tend to indicate the end of a move.

Then today, Chevron (CVX) cracks.

In keeping with Elder’s method of trading options, as was done with the Delta Airlines (DAL) trade, the chart is documented below.

Note: The Delta Put expired with no revenue on the trade. This is how the method is implemented. Many small losses that are peppered by a significant gain (not advice, not a recommendation).

Chevron CVX, Daily

Over the next week, CVX could get ahold if itself and stabilize … or it could completely fall apart (not advice, not a recommendation).

We can already see, it appears to have posted a double top with a swift reversal.

Probabilities favor the downside.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279