A Glimmer of Hope

A little glimmer of hope in the oil sector yesterday but, as expected, BP did not participate. RIG also got hit as offshore exploration looks like a threatened species, although it recovered from an almost 10% decline by the end of the day and APC, as one of BP partners, is also in the doldrums. A bit surprising perhaps DVN is looking almost bullish. Almost but not quite. What DVN does have going for it is a LR30 channel that is the nearest to level of the bunch.
However, just a quick look at XLE, XTO and XOM shows an almost identical technical pattern with DVN other than the LR30 channel . . . they're all looking like the next move is down.

After confusing some of my readers by adding NEM and GLD to the currency Rotator, I'm now adding XLE also. In reality, oil is the commodity that drives much of the global economy and while gold may be a tangible hedge, the supply and access to oil is still an important variable in the defining the stability of world currencies.

A little aside here . . . Back about 2o years ago when I was project manager for a $400 million project in Indonesia none of the international contractors working the job wanted to get paid in local currency because the political climate there was so volatile as was the value of the rupiah. Instead, contracts were paid in oil. . . tankers of which were dispatched to various US and foreign ports as payment.
OK, I could bore you to tears with the rest of the ill-fated tale of the Indonesian World Trade Center, but I won't. Instead, we'll just note the little pullback in the dollar that Project Z saw coming. While this certainty doesn't qualify for "reversal" status, a continued short term pull back may provide a lower risk opportunity for chasing the dollar further. And, while GLD also hit a little speedbump, NEM was on a tear as it looks poised to revisit it's mid-May high . . a feat GLD has already achieved.