{"id":18475,"date":"2021-05-31T07:30:15","date_gmt":"2021-05-31T11:30:15","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=18475"},"modified":"2021-05-31T07:30:15","modified_gmt":"2021-05-31T11:30:15","slug":"18475-2","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/18475-2\/","title":{"rendered":"The Post-Holiday Oil Trade"},"content":{"rendered":"

It’s time to bet against oil.<\/p>\n

That sounds crazy… I know. After all, the economy is opening back up. People are traveling again. Demand for energy is skyrocketing.<\/p>\n

Heck, I made that bullish<\/a> argument a few weeks ago when I warned that the price of oil was headed higher<\/a> into Memorial Day. Here we are, just over one month later, and oil is up almost 10%.<\/p>\n

The price of the gooey black stuff traded around $67.50 per barrel on Friday. That’s its highest price in two years. And, lots of folks think oil is headed to $70 per barrel by the end of summer.<\/p>\n

They’re probably right.<\/p>\n

But, for the next couple of weeks, oil is set to fall. Let me explain…<\/p>\n

It’s summertime. And, in summertime we are treated to three national holidays: Memorial Day, Independence Day, and Labor Day. The price of oil tends to rally going into those holidays. Then, it falls immediately afterwards.<\/p>\n

Of course, that didn’t happen last year. The COVID-19 lockdowns interrupted oil’s traditional pattern. But, look at this chart of oil during the summer of 2019…<\/p>\n

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(Click here to expand image)<\/a><\/p>\n

You can see how the price of oil sold off following each of the major holiday weekends (as demonstrated by the red arrows).<\/p>\n

Here’s the chart from 2018…<\/p>\n

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(Click here to expand image)<\/a><\/p>\n

Just like in 2019, oil rallied going into all three of the summertime holidays – then it fell right afterwards.<\/p>\n

This is a fairly consistent pattern. And, it’s one I expect will play out this year.<\/p>\n\n\n\n
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Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

If you bought oil last month in anticipation of a pre-Memorial Day rally, then congratulations. You’re up about 10% on the trade – which is an outstanding gain for one month. Now though, it’s time to take the profits.<\/p>\n

Aggressive traders might even consider betting on oil falling over the next couple of weeks. That should work out well if the traditional post-holiday decline occurs this year.<\/p>\n

But, don’t stay too long in the trade… Independence Day is right around the corner.<\/p>\n

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

<\/p>\n

Jeff Clark<\/p>\n

P.S.<\/strong> Every week, my colleague Eoin Treacy puts up a short video on the goings-on in the markets<\/p>\n

So far, he’s talked about bitcoin<\/a>, inflation<\/a>, and what trades to look out for post-pandemic.<\/a> So, tune in for his third video down below where he shares his current market insights on gold, bitcoin, and oil…<\/p>\n

<\/a><\/p>\n

Eoin’s Insights<\/strong><\/h2>\n

Hey Market Minute<\/em> readers, I’m back with another installment of my weekly series where I talk about what’s going on in the markets.<\/p>\n

Today, I’ll be discussing the rally in gold, the aggressiveness in bitcoin, and the effects of the money printing trend in oil. Just click below to start watching. <\/p>\n

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