{"id":14404,"date":"2019-08-12T07:30:44","date_gmt":"2019-08-12T11:30:44","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=14404"},"modified":"2019-08-12T07:30:44","modified_gmt":"2019-08-12T11:30:44","slug":"is-oil-ready-to-rally-again","status":"publish","type":"post","link":"https:\/\/stage.jeffclarktrader.com\/market-minute\/is-oil-ready-to-rally-again\/","title":{"rendered":"Is Oil Ready to Rally Again?"},"content":{"rendered":"

Labor Day is just three weeks away.<\/p>\n

It’s the last holiday weekend of the summer. So, it’s the last chance for the oil companies to gouge vacationing drivers.<\/p>\n

Yes, I’m being sarcastic… but, only slightly.<\/p>\n

You see, there are plenty of examples of oil prices bottoming a few weeks before a major travel holiday and then spiking higher as that holiday approaches. For whatever reason, those examples are most extreme during the summer.<\/p>\n

Think about the last time we traded oil. We turned bullish on oil in early June<\/a>, less than one month before Independence Day.<\/p>\n

Back then, there really wasn’t any fundamental reason to expect the price of oil to rise. The price of oil had fallen more than 20% in the previous month. Oil inventories were near their highest levels in five years. And concerns over the U.S.-China trade war were weighing on the economy.<\/p>\n

But we bought oil anyway – because, for whatever reason, the price of oil seems to always rally going into Independence Day.<\/p>\n

By the time the fireworks went off, oil had rallied 14%. Traders who bought shares of the United States Oil Fund (USO) in early June were able to lock in a 14% gain when we suggested selling the position three weeks later<\/a>.<\/p>\n

Ever since then the price of oil has been falling. Last week, oil traded down to its June low of about $51.00 per barrel. And, I think that action is giving traders another chance to buy into the gooey black stuff just in time for another pre-holiday run-up in price.<\/p>\n

Take a look at this chart of USO from last year…<\/p>\n

\"\"<\/p>\n

Last year’s pre-Labor Day rally in oil got started around mid-August. The price of oil rallied about 10% in just two weeks last year.<\/p>\n

Traders should note that this year’s pre-Independence Day rally played out almost exactly as what happened last year. If the expected pre-Labor Day rally plays out similarly as well, then it looks like we have a pretty nice setup for buying oil right about now.<\/p>\n

Best regards and good trading,<\/p>\n

<\/p>\n

Jeff Clark<\/p>\n

Reader Mailbag<\/strong><\/h2>\n

In today’s mailbag, Jeff Clark Trader<\/em> subscribers comment on recent trades…<\/p>\n

\n

After reading your analysis on Monday, I bought the SPY calls. I probably bought it too early in the day because it declined about 12% after I bought. Hopefully by the end of the week it will snap back and give me a decent short-term gain. Kept the position size small just in case. Thanks for all your teaching!<\/p>\n

– Don<\/strong><\/p>\n<\/blockquote>\n

\n

Good morning, from a new subscriber…<\/p>\n

Seems the markets are throwing you curves the past few weeks…<\/p>\n

You lean one way, the market leans the other. You point to a given timeframe, the market shortens or extends it. That’s just my impression, nothing further. Happy to be here. Anticipating the really big volatility down the road.<\/p>\n

– James<\/strong><\/p>\n<\/blockquote>\n

Thank you, as always, for your thoughtful insights. We look forward to reading them every day. Keep them coming at feedback@jeffclarktrader.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s the last holiday weekend of the summer. So, it\u2019s the last chance for the oil companies to gouge vacationing drivers…<\/p>\n","protected":false},"author":37,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-14404","post","type-post","status-publish","format-standard","hentry","category-uncategorized","publication-market-minute","person-jeff-clark"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/14404","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/37"}],"replies":[{"embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=14404"}],"version-history":[{"count":0,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/14404\/revisions"}],"wp:attachment":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=14404"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=14404"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=14404"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=14404"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=14404"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=14404"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=14404"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}