{"id":21052,"date":"2023-07-18T07:30:58","date_gmt":"2023-07-18T11:30:58","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=21052"},"modified":"2023-07-18T07:30:58","modified_gmt":"2023-07-18T11:30:58","slug":"why-this-is-not-the-time-to-buy-oil","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/why-this-is-not-the-time-to-buy-oil\/","title":{"rendered":"Why This is Not the Time to Buy Oil"},"content":{"rendered":"

My favorite oil trading indicator just flashed a “sell” signal.<\/p>\n

Traders who bought oil in early May – based on this indicator’s buy signal<\/a> – should lock in profits on the gooey black stuff right now.<\/p>\n

The price of oil is likely headed lower in the days ahead.<\/p>\n

Yes, the price of oil is up about 8% since we got that previous buy signal.<\/p>\n

Saudi Arabia is cutting back on production. The United States is looking to build up its strategic petroleum reserve. And, Goldman Sachs thinks oil is headed to $86 per barrel by the end of the year.<\/p>\n

So, there are plenty of reasons to be bullish on oil.<\/p>\n

But, there’s one really important reason to be bearish…<\/p>\n

The Oil Volatility Index (OVX) flashed a sell signal last Thursday.<\/p>\n

Take a look at this chart of the CBOE Crude Oil Volatility Index (OVX) along with its Bollinger Bands…<\/p>\n

<\/p>\n

\"Image\"<\/p>\n

Similar to the stock market’s Volatility Index (VIX), the OVX provides buy and sell signals whenever the price of oil pops outside of its Bollinger Bands (solid blue lines).<\/p>\n

Bollinger Bands measure the most probable trading range for a stock or an index. When a chart pokes outside of its Bollinger Bands, it indicates an extreme move – one that is likely to reverse.<\/p>\n

On the OVX chart, we get sell signals when the index drops below its lower Bollinger Band.<\/p>\n

Over the past year, we’ve had six sell signals (red arrows). The most recent one was generated last Thursday.<\/p>\n

Here’s how the price of oil behaved following the previous sell signals…<\/p>\n

<\/p>\n

\"Image\"<\/p>\n

The price of oil declined immediately following all previous sell signals over the past year.<\/p>\n

However, the strongest signals occurred when West Texas Intermediate Crude (WTIC) was trading near its upper Bollinger Band.<\/p>\n

That’s the setup we’re looking at today. WTIC oil is trading near its upper Bollinger Band. And OVX has just generated a sell signal.<\/p>\n

This is NOT the time to buy oil. That time was several weeks ago – when the OVX flashed a buy signal.<\/p>\n

Now it’s time to sell oil.<\/p>\n

We’ll look to buy it again once OVX rallies back up to its upper Bollinger Band.<\/p>\n

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

\"Signature\"<\/p>\n

Jeff Clark<\/p>\n

<\/p>\n

\n

READER MAILBAG<\/h2>\n<\/div>\n

Are you making profits on oil with the latest rally?<\/p>\n

Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com<\/a>.<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

My favorite oil trading indicator just flashed a \u201csell\u201d signal.<\/p>\n","protected":false},"author":55,"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-21052","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/21052","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/55"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=21052"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/21052\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=21052"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=21052"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=21052"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=21052"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=21052"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=21052"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=21052"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}