Target, Met?
The XOP chart, shows today’s price action super-imposed on yesterday’s chart.
Did XOP meet the target well enough for a test? (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Testing The Break
The day after the wedge ‘throw-over’, labeled as No. 1, on the chart was this post, link here.
Three days after that, labeled as No. 5, was the last of the upside before the largest (oil price) collapse since 2020, link here.
The chart shows a potential area for the ‘test’ (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
XOP Wipeout
Oil & Gas Exploration sector XOP, collapsed by – 14.72%, this past week.
Prior to that melt-down, two scenarios were presented for the sector.
One, was a commodity style blow-off move, and the other, an immediate reversal.
The potential chosen, was dictated by the tape itself in this post, and shown on the chart.
Oil & Gas Exploration XOP, Weekly
The ‘measured move’ target from the wedge breakdown is shown. What’s not known is if, and when, price action will get there (not advice, not a recommendation).
Note: We’ve already had the ‘fast’ move.
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The Danger Point®, trade mark: No. 6,505,279
Down From The Highs
Continuing with the theme of Oil & Gas producers (XOP) at the extreme and potentially backing off, we have Occidental Petroleum OXY (not advice, not a recommendation).
OXY is posting the usual suspects of up-thrust (past resistance), then a return below and test.
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What About ‘Higher’?
Wyckoff said a century ago:
‘The tape is the master, and the tape, is a tyrant’.
We have to go with what it’s telling us.
Looking at XOP, it’s possible we’re in a wedge ‘throw-over’ reversal (not advice, not a recommendation).
Watching for a new daily low … otherwise we’re (potentially) back to higher levels.
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The Danger Point®, trade mark: No. 6,505,279
Confirmation of Price Action
The Wyckoff technique (in its purest sense) focuses exclusively on price action and volume.
Wyckoff himself said, ‘if you can’t ignore the (financial) news, you’ll never be successful in the markets.‘
With that, we have this just days ago, concerning the oil market, based on price action itself:
“Continued hostilities in the Middle East, along with oil tankers being sunk, do not seem to be materially affecting the (already high) price of oil.”
ZeroHedge Reports
Now, this just out from ZeroHedge, link here.
‘The Straight of Hormuz, has lost it’s grip on oil prices.’
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The Danger Point®, trade mark: No. 6,505,279
The Sector Has Reversed
We’ve all heard it before.
High oil prices tend to precipitate out recessions, or maybe a depression in our case (not advice, not a recommendation).
When looking at XOP, a proxy for the Oil & Gas sector, it appears to be front-running a decline in oil prices.
Or, possibly a decline in demand.
There’s also a familiar repeating pattern.
Oil & Gas Exploration XOP, Weekly
Once nuance to note:
Continued hostilities in the Middle East, along with oil tankers being sunk, do not seem to be materially affecting the (already high) price of oil.
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The Danger Point®, trade mark: No. 6,505,279
Demand Collapse?
Across the pond, the U.K. seems ready to introduce Universal Basic Income; welcome to Neo Feudalism.
Meanwhile, back at the ranch in Germany, we have Survival Lilly giving us updates near daily, on that pending implosion.
‘You will own nothing‘, time Stamp 6:20
With all of that said, including the military hijinks in the straight, you would think uncertainty results in oil prices ever higher.
At this point, it’s not happening.
Oil & Gas Exploration ETF, XOP, Weekly
Oil & Gas Sector XOP, has been declining for three straight weeks (not advice not a recommendation).
There’s the familiar pattern: Spring-to-Up-Thrust
Like previous posts, we need to be reminded (at least I do), of the massive scale of events.
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The Danger Point®, trade mark: No. 6,505,279
Bull Market, or Not
Overnight, oil futures launched higher.
Selected news links, below:
Oil Could Hit $130 In “Worst Case Scenario”: JPMorgan, link here.
Images Emerge Of Tehran Destruction After Major Israeli ‘Preemptive Attack’; IRGC Chief Killed. link here
Crude propelled by Israeli attacks on Iran; ES -1.1%, DXY +0.8% – Newsquawk US Market Open, link here
Crude +8%, ES -1.5% after Israel conducts strikes on Iranian nuclear & military targets – Newsquawk Europe Market Open, link here.
Oil, Bull Market?
Even as this post is being created (8:54 a.m., EST), oil futures are backing off overnight highs.
It’s what happens next, that’s important.
If oil and related markets like XOP, can’t hold or surpass those highs, well then, we have our answer (not advice, not a recommendation).
Oil & Gas, XOP, Daily
In the pre-market session, XOP is trading just below the 61.8%, Fibonacci projection.
If the XOP wave is ‘corrective’, shown as ‘a-b-c’ above, that means it’s against the main trend (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Picture Perfect
Exxon’s is one of the large-caps in the Oil & Gas sector ETF, XOP.
The potential for (downside) reversal in XOP, first presented here.
As part of the prep work to position short, the question was whether to short XOP, or one of the big caps.
As you can be seen, since XOM-25-01, is in the sidebar, we’ve gone short Exxon during yesterday’s session (not advice, not a recommendation).
As the chart shows, there was a small gap lower yesterday, presenting the risk that it would be filled before action continued lower.
That might still happen.
However, with XOM down 1.83 pts., in the pre-market (as of 9:12 a.m., EST), upside probabilities have lessened.
Exxon XOM, Daily
We have what appears to be, a picture-perfect Wyckoff up-thrust, and reversal.
If yesterday’s gap-lower open is not filled, then it’s a ‘breakaway’ gap, indicating (probability for) much lower prices ahead (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
