Give Me WTI Over Brent Crude All Day
- Posted by JC Parets
- on February 21st, 2014
For several years now, the price of Brent Crude Oil has been nicely outperforming prices of the West Texas Intermediate light sweet crude oil. But I think we’re finally starting to see that shift in momentum back towards WTI.
This next chart takes a closer look at that whipsaw in the USO/BNO spread. Not only do you have an island reversal of sorts down there, but also a nice bullish divergence in momentum:
I think this spread can easily get back to 93, but this false breakdown can absolutely be the catalyst to take this spread substantially higher and well above parity.
From a risk management standpoint, more tactical participants want to see this spread hold above 82. A breakdown below that would signal to me that more consolidation may be necessary. Under those circumstances, this chart becomes messier. We definitely want to see those levels hold.
REGISTER HERE for more information on how to get on our commodities distribution list.
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.blog comments powered by Disqus
J.C. Parets is the Founder & President of Eagle Bay Capital, LLC. He earned the Chartered Market Technician designation (CMT) and is a member of the Market Technicians Association. More
- Eagle Bay Capital Managed Assets
- They Hate Cotton Right Near Historic Support
- Financials Are Breaking Key Support On a Relative Basis
- The Problem That I See With Silver
- Words of Wisdom From Jim Rogers
- Watching Micro-caps to Gauge Risk-Appetite
- Here’s Why There Is A Trade In Corn
- Fox Business: S&P500 On Multiple Timeframes
- Which is the Best S&P Sector to be Overweight?
- Materials Look Attractive on a Relative Basis
Archive by Year