Crude Triggers a Buy Signal

From the Desk of Ian Culley @IanCulley

Stocks aren’t the only assets catching a bid.

Commodities are, too. 

Despite their current rallies, the average investor isn’t concerned with cocoa, cotton, and lean hog futures. 

I get it… What do lean hog futures have to do with Tesla $TSLA?

But Dr. Copper – with its Ph.D. in economics – is ripping higher this week. 

And crude oil is trading above our risk level outlined last month.

Check out crude oil futures slicing through the 75 level:

Kudos to those who took the signal, as it’s over a third of the way to our target of 83. 

Crude is up 0.75% today alone, heading into the close with an intra-day high of 78.21. I like seeing strength heading into Friday’s close, as it often spills into the following week.

I imagine crude will hit our target within the next few weeks.

I’m taking profits at our target without question. The 83 level marks a logical potential resistance zone. And crude trades closer to the lower bounds of a much larger consolidation.

I believe crude will eventually break above 83 further down the road. When it does, we can turn our sights toward 95.

For now, our bullish commodity trades are working. Cocoa has yet to roll over. And the two most influential procyclical commodities – copper and crude oil – look constructive.

That’s not a bad view for commodity and stock market bulls.

Stay tuned!

COT Heatmap Highlights

We're in the process of updating our COT table.

Thank you for your patience. And look for a post early next week, highlighting commercial positioning across the futures markets.