Wednesday, February 21, 2007

CRX and USO Update

Crude oil was up 1.21 for the April contract while the May Contract was up 1.29. Usually when oil is advancing the nearby month should rally more than the back months to be considered bullish, but we didn't see that today. The spreads were slightly bearish but I've been long oil because of the bigger picture. I'm focused on what the commercial traders have been doing and the seasonal strength this time of year.

You can see in the above chart the "potential" 1-2-3 bottom that is developing. Right now my trailing stop is below point number 3 for about 70% of my long position.

The CRX index finally broke out above the May high which was my original objective for this trade. You can read why I was buying commodity stocks back in January by clicking here.

You might be wondering which stocks have been leading the CRX index higher. It's mostly steel stocks such as X. Steel has been on fire.. POT has also been a very strong stock in this index.

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