Always a Bull Market Somewhere?

The equities and bond markets are trading in a bearish trend. The markets are adjusting to a Fed that is a bit more aggressive in its fight against inflation and trying to stave off a recession and valuations are getting adjusted by this sell off.

This may be painful for many right now, but in the long haul this could be a forthcoming situation where we will be able to pick up stocks at bargain prices to where they are and were and for that we may be thankful – later.

Despite this decline, per the popular personality on a major financial news network whose moniker is there’s always a bull market somewhere, we will focus on the sector that IS showing positive upside momentum and that’s Oil.

Focus on the Charts and Prepare for Opportunity

When you find a sector that you feel is strong (or weak) you want to focus on technical analysis to find not only an entry opportunity, but projections for future price moves and THEN execute trade management.

We see that opportunity in the United States Oil Fund, LP, (USO). Per the yahoo finance profile this is what they have as a description for USO: USO invests primarily in futures contracts for light, sweet crude oil, other types of crude oil, diesel-heating oil, gasoline, natural gas, and other petroleum-based fuels.

One of our favorite technical patterns is when ‘Old Resistance becomes New Support’ (and it’s opposite).

This is where price breaks out of a price level that has been a price are the security has had trouble breaking through to the upside, but finally does. The security then sees the price come back to that price level, but then stalls and gets hung up for a time until more buying steps in and propels it higher.

We’ll comeback to that pattern in a minute.

What is an Up Trend?

An uptrend is defined as a security that looking at the chart shows prices from the left side of it to the right shows the price getting higher.

It does so in a manner where the pivot highs are getting higher, and the pivot lows are also getting higher (higher highs and higher lows).

There are many other formations that can happen in an uptrend, but so long as that price action just described is happening that security is in an uptrend.

52-Week High

An other thing one can look at is where the security is in relation to its f2-week high in price.

My online options analytic software www.tomsoptiontools.com has a tool where one can search stocks by what’s called the Hi / Low tool. It will show you what percentage of it’s 52-week high the security is at.

90% or higher means the security is within 10% of its 52-week high.

This is a sign of strength for the stock AND if one can find a stock at 10% of its 52-week high in a bear market that is what’s called Positive Relative Strength.

Look at the reading on USO from www.tomsoptiontools.com

As of today, close it is at 92.65% or you can say it is within less than 8% from its 52-week high. That’s strength. Back to the Pattern Old Resistance becomes New Support:

One can look at a few more instances where UAO tested the price of 82 but looking more specifically at the closing price of the pivot high shown by the green arrow on the left and then looking at the low of the candle for today’s price, which signifies the low print price of the day one can see what may be a reason for the upward price action of USO happened after its recent little slide back in price.

One thing we like about this pattern is we can assess a potential price move higher. In this case up to at least the prior pivot high, but one also can consider the new support price as a technical stop in that IF the security does not trade higher and instead trades below that pivot low support price one can stop out of any trade one might be in.

App: Toms Option Tools

Toms Option Tools scan the markets for bullish and bearish trade opportunities using our proprietary scans and strategy algorithms. TTR Darknet finds bullish entries based on triple stack channel collisions. Money Calendar identifies seasonal patterns with at least 90% accuracy looking back 10 years. Weekly Cash Clock finds short term opportunities that last a week on average. Microcurrency Trader applies Darknet technology and moving averages to cryptocurrencies. Velocity Trader utilizes volume spike and Velocity indicators on custom stock lists. Quantum Scripts scans the markets for momentum acceleration signals and employs Quantum noise filters. Optimal Trader finds directional pre-earnings opportunities that are optimized for entry date, stock movement, and volatility surge. My Trades tracks the profit/loss of your trades, displays stock charts and risk graphs, creates new trades, and edits existing trades. Morning Report provides top 10 option rankings in 6 categories each day.

Disclaimers

Stock and options trading has large potential rewards, but also large potential risk.

You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.

This is neither an offer to buy/sell/ or recommend a particular stock or option.

Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been actually executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with hindsight.

No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Disclaimer of Warranties and Liabilities Tom Gentile and TomsTradingRoom, LLC including employees, consultants, and editors (“Publisher”) cannot and do not warrant the completeness or accuracy of the content found in our areas, or its usefulness for any particular purpose.

Tom Gentile and TomsTradingRoom, LLC also make no promises that our content or the service itself will be delivered to you uninterrupted, timely, secure, or error-free. Under no circumstances will Tom Gentile and TomsTradingRoom, LLC be liable for direct, indirect, incidental, or any other type of damages resulting from your use or downloading of any content on our site.

This includes, but is in no way limited to, loss or injury caused in whole or in part by our negligence or by anything beyond our control in creating or delivering any portion of Tom Gentile and TomsTradingRoom, LLC.

You are agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that Tom Gentile and TomsTradingRoom, LLC will not be liable for any I, investment decision made, or action taken by you, or others based upon reliance on news, information, or any other material published by Tom Gentile and TomsTradingRoom, LLC.

Tom Gentile and TomsTradingRoom, LLC relies on various sources of information that we believe to be accurate and reliable. However, we make no claims or representations as to the accuracy, completeness, or truth of any material contained on our site.

Tom Gentile and TomsTradingRoom, LLC are educational portals, providing content for educational and informational purposes only. Neither Tom Gentile nor TomsTradingRoom, LLC are a broker/dealer. Investors need a broker to trade stocks and options and must meet certain requirements. All securities, futures, and investments data and ideas are offered to self-directed investors. All prices in USD unless noted otherwise.

A full disclaimer can be found here:  http://www.tomgentile.com/legal_disclaimers.html.