Crude oil is setting up for a big move, and almost nobody is paying attention. In fact, sentiment in the energy trade couldn’t be more bearish right now. Everyone hates it, everyone.
As Strazza said on our call yesterday, “Even Warren Buffett is losing money on this one.” That’s the vibe.
XLE keeps dropping, the bearish sentiment intensifies, yet producers are stepping in and buying. That’s a bullish signal if I’ve ever seen one.
There are plenty of reasons to start liking energy here, especially when headlines like these are flying under the radar of most U.S. investors.
Sure, this crisis might trigger a short term pop, but I’m not in it for a flash move, I’m looking for a trend.
And the pieces for a sustainable breakout are falling into place.
Let’s talk about seasonality. Most people think energy’s best season is summer. Makes sense, right? But the data tells a different story. Energy peaks in the summer, then drifts into bearish seasonals, until now.
The sweet spot for energy? It’s right here: December through May 2025. While we’re not buying purely because of seasonals, it’s certainly a nice tailwind.
And the final reason I’m paying attention?
The chart. It’s crystal clear, and it’s giving us the exact roadmap we need. Take a look at the weekly crude oil chart: this is the kind of setup I wait for as someone who’s been trading commodities for over 15 years.
Here’s the thing about oil, it doesn’t consolidate for long periods. It’s not its style. But when it does consolidate, it sets up for massive moves. That’s what we’ve got here.
We’re looking at a textbook setup:
A band squeeze breakout.
A breakout to a 100-day high.
And the buy signal? $75.12.
That’s the level. Above $75.12, we’re buying. The first target is $86. If we can clear $86, oil is likely heading back to the old highs north of $100 per barrel.
This is the kind of rare setup in oil that doesn’t come around often. Everything is lining up: seasonals, sentiment, and technicals. Time to get ready.
