Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

Check Out This Economic Indicator

by April 21, 2023
April 21, 2023
Check Out This Economic Indicator

One of the areas of the market that continues to struggle is oil. OPEC recently pushed the price of WTI crude above a prior high, but that has not held. I got an interesting email this morning from an oil and gas friend asking why his stock has dropped 20% recently. It was a small Canadian Oil and Gas company, but the same thoughts work across the spectrum.

Let’s use a company like COP. The stock continues to make lower lows and lower highs. The relative strength shown in purple continues to underperform. Until the stock can start outperforming the S&P 500 it’s going to be difficult to attract capital. The outperformance would show when this area chart in purple starts to turn up. Momentum shown by the PPO is rolling over here at a similar level to late January. That could change at any time, but it hasn’t started yet.

So is this an isolated picture? Let’s look at the crude oil markets. Here is Brent crude. Brent continues to underperform the $SPX. Brent has been stuck with a price high around $87 and the recent March move by OPEC got price back up to the highs of the range, but it couldn’t break out. Momentum (PPO) is rolling over.

On this side of the world, we focus on WTI. Here is the chart for $WTIC. This chart continues to underperform the $SPX as well. However, price actually broke out above the previous highs around $81. Currently this looks like a failed breakout. Failed breakouts are often a better clue as to the direction and at this point, lower seems to be winning. What would it take to change my mind? If oil can make a higher low and then get back above the $81 level, that makes the price action a lot more interesting. PPO is rolling over, suggesting the momentum is waning.

We can look at the oil producers ETF. It continues to weaken and has not been able to get back to prior highs, even though OPEC has taken 3 million barrels per day off the market.

However, for me, oil is one of the better economic indicators and these charts above all look weak, confirming the problem for the broader economy. Economic activity is declining and oil is telling us very clearly, demand is weaker.

When I look at the $SPX, this chart is starting to see what oil is saying. It is testing prior highs, but after three weeks here, it is struggling to break out so far. PPO is rolling over, and those sell signals have been pretty helpful indicators for upcoming market weakness.

This is not a doom and gloom forecast. It just shows the market is trying to price the economic slowdown, and crude continues to tell us that demand is slowing. When oil and oil producers start to base and breakout to the upside, I’ll be a lot more comfortable about the broader economy starting to accelerate.

0
FacebookTwitterGoogle +Pinterest
previous post
The Achilles Heel of ETFs
next post
Lead Prices Foretell CPI Changes

You may also like

Missed Amgen’s 5% Surge? Here’s What You Need...

February 5, 2025

Down-and-Out Stocks Entering New Uptrends – These 8...

June 10, 2023

Core PCE Data Has Powell Pleased – May...

March 30, 2024

How High Can Gold Prices Go? The Tools...

September 17, 2024

These High-Yield Stocks are Still Winning Despite Market...

March 29, 2025

Seasonal Sector Investing in the Fall: Top Sectors...

July 16, 2024

GNG TV: Charts Flash Warning Signs of Further...

October 27, 2023

Indexes Masked by Mega Tech

May 13, 2023

Top 5 StockCharts Features to Use Every Day,...

February 24, 2023

Master The Most Underutilized Options Income Strategy: Cash-Secured...

May 15, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Senate shuts down Kaine’s attempt to check Trump’s war powers

      June 28, 2025
    • 3 Stock Setups for the Second Half of 2025

      June 28, 2025
    • Trump touts administration’s progress on peace deals, says world leaders ‘respect our country again’

      June 27, 2025
    • Venezuelan opposition member details harrowing 400-day captivity at UN

      June 27, 2025
    • Anxious Republicans turn to Trump amid divisions over ‘big, beautiful bill’

      June 27, 2025
    • JD Vance poised to clinch victory for Trump’s landmark bill as GOP finalizes strategy

      June 27, 2025

    Categories

    • Business (8,329)
    • Investing (2,081)
    • Politics (15,842)
    • Stocks (3,176)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved