Oil and Gold turn to Rubber

Just a quick intraday post.

Oil and gold are having a pretty big up day, which is no surprise considering how badly they've been pummelled in recent weeks.

Oil - more precisely, OIH, which I consider a proxy for the major oil services stocks - is doing a textbook retracement to its neckline. The bolder among us may want to short aggressively here. This is a gorgeous head and shoulders pattern. It's always scary shorting at a time like this, naturally, because there's a lot of strength. But retracements to necklines often represent the lowest-risk time to go short, since you've got a crystal-clear stop loss level in case you're wrong.


Gold ($XAU) is murkier. It was forming a head and shoulders pattern, but it didn't get back down to its neckline. In addition, the price has pushed its way to a major Fibonacci retracement level, which implied the selling was over for now. So I'm steering clear at this point.


At the moment, the stock indexes are showing a skosh of weakness in spite of earlier strength. Let's hope it continues until the close!