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Energy-The next leg up

Oil and the energy sector are fast approaching the 200 day moving average. I am not the biggest fan of moving averages but I know for a fact that almost everyone has one on their chart. Even the traders who say that they hate “moving monkeys” lol. As we are watching this, I am also seeing that the COT report has commercial traders coming in at a significant level where we usually see bottoms in the oil market. (First chart)

I do think that the major trend will be inflation over the next few years with disinflationary periods in between. Are we coming out of that disinflationary period?Let’s take a look.

The futures curve also is set up to bring the commodity higher again. Currently we are long gasoline and the energy sector. Oil is very close to a buy signal as well. This is much different than our recent positioning (we are still holding on to our long tech trades which are holding up very well) however, what I do as a trader is I trade what is in front of me. I do not trade what I hope will happen.

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