I have been trading oil for almost 20 years (man I'm getting old) and almost every major turn in the market was marked by a political event.
This seems to check all the right boxes for a "value" play here.
Lots of high quality names with big divys are attractive.
Although occurring a lot faster, so far it looks similar to the Q4 2018 #shitshow
A. Leg of ~16% down
B. Correction of ~50% of move
C. Leg that may reach ~20-25% total correction coming in to confluence with the fib extensions and the volume supports?
Weekly 200ma and fib extensions are showing some nice confluence there.
Would not be surprised if these levels were hit around mid-Sept to mid-Oct when the next round of catalysts in Canada were coming
Pretty good track record since 2009 of getting long in August for the annual inventory build up going in to winter.
Current inventory levels (see chart here: ir.eia.gov) are close to the 5yr average so expectations for the trade will also be average.
Everyone needs to pay their rent.
$IIPR is by far the strongest name in the sector
A real lesson in trend following here
And a real lesson in who is actually making money in the sector and attracting a bid in the market
On a monthly basis, the $IWM/$SPY ratio has not been so low since Feb. 2016
As major indices are pushing all time highs and the small caps and high beta stocks will play catch up
Seems like a great summer to accumulate some small cap names for the fall run
I am not a big proponent of trendlines but this pattern is coming to a head real soon. This wedge lines up with a bunch of other stuff I am seeing, hearing, feeling.
Not sure how or when it plays out but it would seem logical to sell a bit in to the strength and buy some puts about a month out.
Been trading this setup nicely since the Q4 2018 dump
$LULU has great relative strength and is setting up a beauty bull-flag
Targets are the fib extensions off the flag
Calls in the 155+ range seem reasonable