Wesley Chapel, Florida, February 20, 2008 -- Crude oil
futures got a lot of publicity in the first couple of days of 2008 when
prices reached $100 a barrel for the first time – albeit briefly – and then
edged above that mark. After January’s downtrend fell more than $14 off the
high, Tuesday’s surge in crude oil prices has traders thinking about $100
per barrel again. Oil sector stocks soared Tuesday as crude prices convened
to close above $100 a barrel for the first time.
"They may have
already missed the best part of a rally, but users of VantagePoint Intermarket Analysis Software had good clues more than a week ago that prices might swing up again despite
talk about how the U.S. slide into an economic recession would likely dampen
demand for oil and pressure energy prices," said Darrell Jobman analyst for
www.TradingEducation.com. The surge in oil prices was due to many factors, which include further
dollar declines, an oil refinery explosion that occurred Monday and news of
a possible cut in production.
Gasoline and
heating oil futures also advanced as a result; a testament that no one
market acts alone. Intermarket relationships between markets can be seen
every day.
By analyzing the
influence that other interrelated markets have on crude oil prices,
VantagePoint detected underlying strength even as crude oil prices dipped
close to the January low under $86 a barrel on Feb. 7 (vertical line on
chart), when the predicted short-term difference (red line in lower panel on
chart) crossed above the predicted long-term difference (blue line). The
difference indicators measure the difference between predicted and actual
moving averages and provide the first alert in a three-step process in one
VantagePoint trading strategy.
The second clue
came a day later when VantagePoint’s predicted neural index, a proprietary
indicator, moved from 0.0 to 1.0 (2 on chart), suggesting a long position,
as crude oil prices staged a big up day represented by the long white
candle. Confirmation came with the turn to the upside by the predicted
medium-term moving average (blue line) and the crossover (point 3) above the
actual medium-term moving average (red line).
A logical place
to enter on these long indications might have been above the interim January
high or about $92.80 (4 on chart). By getting into a long position early,
VantagePoint traders don’t have to worry about where to get onboard this
rally but can just ride the wave to $100 – and beyond? – where they can
observe how the market deals with this significant resistance area a second
time.
About TradingEducation.com, LLC
Established in September 2005, TradingEducation.com, LLC (www.TradingEducation.com)
has developed into a comprehensive internet resource offering traders free
educational materials, quotes, and market relevant news for stocks,
exchange-traded funds, commodities, currencies, futures and options. Traders
from all experience levels can benefit from the wealth of information and
tools available at TradingEducation.com which seeks to enhance their trading
strategies and avoid costly mistakes. All information on
TradingEducation.com, LLC websites is free to the public, with operational
initiatives supported solely by advertisers.
About Market Technologies, LLC
Headquartered in Tampa Bay since its founding in 1979 by Louis B.
Mendelsohn, with trading software customers in over 90 countries worldwide,
Market Technologies is a fast growing, Inc. 500, company and recognized
world leader in market forecasting. Market Technologies researches and
develops proprietary trend forecasting and market timing technologies that
utilize artificial intelligence applied to intermarket and hurricaneomic
analysis, in order to forecast various commodity and financial markets
throughout the world. These presently include, but are not limited to,
stocks, stock indexes, ETFs, energies, interest rates, currencies, metals,
grains, meats, softs and Forex, covering over 600 world markets.
www.TraderTech.com
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