Crude Oil Looks Gassed - Another Bearish Sign?

Crude oil is looking gassed - is it in the process of topping?

Over on our sister site, we explore what's happening to crude - and why this may be bearish for oil prices.

Does crude oil have anything left in the tank?  (Source: StockCharts.com)

Oil Prices Get Rocked - Again!

It's been a tough couple of trading sessions for oil, as it's gotten walloped both days.  This is not a pretty chart towards the right, at least for oil bulls: 

Source: Barchart.com

Make no mistake, Peak Oil or not, the black goo has had a helluva run - from the $35, all the way up to $85 recently.  That's nothing to sneeze at, though less impressive when viewed with respect to it's freefall from $150.

If you believe that a severe stock market decline is on the horizon - as I do - then you probably also find oil's recent price action quite disconcerting.  It's gotten clobbered right along with equities.  If you're looking for a commodity that has held up fairly well, check out gold's recent performance.

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Crude Oil Breaks Out, But Still a Big Fat Non-Confirmation - Where's China?

Crude oil has broken through the $80 mark once again - trading as high as $82 - before settling back in after hours trading due to "concerns about the US economic recovery." Not even joking about that one.

Crude's on the loose!

(Source: Barchart.com)

Meanwhile the Chinese equity markets - the poster child of the global economic recovery - continue to languish, unable to decide if they have the energy to break through to new highs, or merely are destined to break down once again:

China's rolling? Not so fast, my friend!

(Source: Yahoo Finance)

A few weeks ago, I pointed out these charts as major non-confirmations of the US indices recent highs. Though crude has broken through, I'm going to stick with the hypothesis as long as China languishes.

After thinking about it - crude rallied well into the summer of 2008, while the equity markets were breaking down. Crude was a lagging indicator then, so it's possible that it'll be the last to roll over this time around.

China, though, was among the first to roll over last time. And it looks like it may be doing the same once again.

If China is turning down, look out below - it could be a long way down.

Oil Failing to Rally on Bullish News...A Foreboding Sign

Have you been piling into oil with the rest of the hot money? Might want to think about covering...or even reversing...your position.

Oil expert Matt Badiali writes:

The fact that oil didn't leap up with delight at riots in Iran should make oil investors quake with fear. Iran produces about 5% of the world's oil every day. Its populace is rioting... and yet the price of oil fell 3%.

As my colleague Brian Hunt pointed out, it's a big bearish sign when an asset cannot rally on bullish news. We could see oil prices go into decline any minute.

Since breaking the $70 mark, oil has looked a bit toppy. News that China has stockpiled more oil than it can handle appears to have given investors pause.

Oil may be running out of breath after a huge run-up. (Source: Barchart.com)

Now's probably a good time to take some profits...and if you like to live dangerously, maybe even consider taking a small short position for a short-term trade.

PS - If you're a fan of short-term trading, I'd suggest you check out Jeff Clark's S&A Short Report. It's pricey...but if you're a serious trader, it's really top notch insights and recommendations. And right now they are running a special 3-month trial deal.

It's Time to Short Oil: CNBC's Debating $300 Oil

When CNBC starts asking if oil will hit $300 anytime soon, that probably means we've got a short term top in place.

In fairness to Kevin Kerr - I think very highly of his commodity insights, and this interview is worth watching...his points are all good ones.  

However if you're contrarian trading against CNBC - usually a profitable strategy - that would indicate oil is a short here in the near term.

Crude Oil Drops Over 7% Today

Seems like the same old theme - when the stock market gets slammed, so does crude oil.

Crude oil closed the day below $49/barrel. 

(Chart source: BarChart.com)

When crude is up on days like today, that's when we'll take a hard look at going long crude.  

The only bright spots today?  Gold, Silver, US Treasuries, and the US Dollar.