Before we get started with any chart analysis, it’s important to note in the link above, submittal date for the bill was June 11, 2020; a full six months before ‘inauguration’.
Like the CARES Act (Speck relief bill) was submitted nine months before there was an outbreak in the far east, (the ‘relief’ bill was in the works for years), the Moving Forward Act was already making its way through committee long before the change in administration.
Just a short digression on CARES. Accessing the link above, one finds the original submittal date (January 2019, nine months before the outbreak) is nowhere to be found. History being scrubbed and re-written in real time.
Systematic destruction of the nation’s infrastructure is the plan; but the real target remains the food supply.
How does this knowledge help with Oil & Gas Sector analysis?
Supply disruptions could cause fuel prices (USO as proxy) to go higher while at the same time, drillers and producers go lower (XOP as proxy).
XOP chart analysis identified a potential set-up in this report.
That has proved correct thus far. Knowledge of the overall plan (supply disruption/destruction) lets us know the sector most likely is not coming back … not anytime soon.
Shorting XOP via DUG (not advice, not a recommendation) by repeatedly entering and exiting as required, could be a go-forward plan for months or years to come.
Looking at inverse fund DUG, the entry is shown. Price action retreated (testing) for two trading days before continuing on with its reversal.
It’s early in the move but there’s a potential trend line.
For inverse funds, trends in the hundreds or thousands of percent (annualized) are not unusual.
If the trend is maintained, a 100% gain on the position would occur right about the middle of April.
The image below may be the best descriptor of the (economic) plan going forward. Full (forced) compliance won’t be achieved until every vestige of small-business (Mom & Pop) is destroyed.
On the bright side, at least we know what’s coming.
The near instant, within hours fracking about face, could be used as the economic model; destroy everything and do it quickly.
Self employment (S-Corp of one) may or may not be the ultimate answer. One thing it might do, is offer more time for maneuvering. That’s critical when ‘speck’ injectors show up at large firms and force everyone into line.
With that in mind, two sectors have been the focus as opportunities for short positions.
Oil & Gas, XOP and real estate, IYR.
There are others like gold with GDX down again in the pre-market … thus confirming a bearish trend.
It could wind up that shorting GDX was the best option.
However, since there’s such rabid indoctrination into the hyper-inflation theme, it could be a bumpy road to the bottom … the exact worst thing for an inverse ETF.
Those trading vehicles prefer straight down action. Otherwise, they erode (value) quickly.
Analysis of the Oil & Gas sector was covered just recently, right along with identifying a reversal. XOP is down again in the pre-market with DUG up.
The short position in DUG is being maintained (not advice, not a recommendation) with chart analysis to come over the weekend.
Real estate, IYR shows a lower open as well.
Going short this one (via DRV) has been more time consuming. As IYR heads lower after an apparent false breakout (Wyckoff up-thrust), increasing the line (position size) is the objective; not advice, not a recommendation.
Depending on today’s price action, chart analysis on IYR and DRV will be forthcoming.
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.
Trades are focused on specific price action; therefore, tend to be concentrated only in one or two markets at any time.
We know from a fundamental standpoint, there’s no (or very little) demand for oil and the by-products. Steven Van Metre has contacts in the field that are feeding him information on what’s really going on.
While some of the minions that watch his updates complain about the colors of his moving averages, we’re more interested in the anecdotal data such as ‘oil inventories are piling up’.
Even better was the comment (a few weeks back) that EIA data is not telling the whole story. There’s even more oil than what’s in the report.
That’s our backdrop for shorting the XOP by using DUG. Not advice, not a recommendation.
Recall that DUG, with regards to the firm’s broker, has stated “not marginable” indicating especially high volatility.