The recent crude oil contracts (October, November, December) and now January remain in strong upward trends. We'll point out that in the past, stocks had been the leading indicators, but recently it looks like the commodity itself has been performing better. This may signify that while there looks to be a bull in oil, it could be an older bull and not have the legs as it did earlier this year.
Oil Index Chart - last seven months.
We've put up a chart of the OIX.X so traders can see what we are observing. In previous months, much of the activity we were seeing in oil stocks looked to be leading the commodity. Now we're seeing the commodity come close to old highs, but the stocks themselves are lagging. Either this part of the market is inefficient, or the market is telling us something. This might be a place for traders to keep an eye on. If the stocks try to play "catch up", a move above 312 could be the sign. A move to new highs in the January crude contract could give traders confirmation of a move higher. We'd have a plan in place, just in case. You don't think oil stocks are waiting on election results too do you?
Traders should have had plenty of time to get some up-ticks in shares of Krispy Kreme Doughnuts (KREM) in the past hour and the trade is starting to work in our favor. We witnessed some nice sized trades occurring at $78.75 and it may be some players taking profits that bought the stock on the big drop down. We don't blame them, we'd be cutting out here too if we were long.
Krispy Kreme Doughnuts Chart - 60-minute interval.
Shares of KREM are now at session lows and day-traders that will want to close out positions before the end of trading should move their stops down to break-even. We'll continue to follow this trade from the swing-traders perspective and begin using our "python" approach to try and squeeze a profit out of the trade. MACD is starting to roll below the zero level. Looking good here.