The AMEX Oil (^XOI), AMEX Natural Gas (^XNG) and PHLX World Energy (^XWE) indices are flowing freely at 7.26%, 4.42% and 3.83% gains, respectively.
Additionally, the PHLX Utility Sector (^UTY) is charging up with a 4.92% quarterly boost.
Finally, the AMEX Morgan Stanley Commodity Index (^CRX) is showing some signs of life. This cyclical index is up over 3.55% for the last three months.
And... the other sectors? How are the fairing? I'll show you in Market Metrics...
Up 11.3% over the last quarter, X is poised to crank to higher levels...
The weekly chart of X reveals the birth of a third impulse wave... typically the biggest of all impulse waves.
Note how the volume tapered-off during the larger third to fourth wave decline from March to July 2005. See how the demand dried-up before the next wave began.
As the next impulse wave gears-up, the strong levels of the Elliott Oscillator and increased volume are evidence the move is getting underway.
Also, the stochastic RSI has turned up... predicting the start of the new third wave.
Are the lofty Fibonacci targets of $95 and $135 within reach?
But, the burning question is... how do I get in for big profits?
Let's look at the daily chart for that answer...
The P&L Dots have consolidated at the 8-10 moving average and are remaining inside the channel... one possible entry point.
But... first, let's check some other short-term indicators.
The 20-period Commodity Channel Index (CCI) is solidly bullish. Any pull-back to the zero line would be an opportunity to go long. The 6-period CCI is well extended and should reverse north rather quickly.
Also, the MA Oscillator is definitely bullish... remaining at or above its upper channel.
As a side note... what is the MA Oscillator, anyway? I know you've been wondering since I introduced it a few months back.
Well, it was created by Mr. Kevin Spratling in the mid-1990's under the name of the Market Annihilator. Think of it as a cross between the MACD and Bollinger Bands.
Typically, I don't like to use proprietary systems. But, since it works so nicely, I'm going to continue to use it.
I'm trying to get Mr. Spratling to let me reveal the formula to my subscribers, only. Stay tuned!
So... where do we enter this trade? I've used the colors of a traffic signal as a guide... green is go, yellow means caution and red says - no way.
Although X closed in the red, the P&L Dots remain in the yellow... which is OK, for now.
Bottom line... wait for a close in the green before going long. Then refer back to the weekly chart as your price target guide.
Don't forget, use a 10% money management stop loss order to protect your capital. As your profits increase, move up your stop loss order, accordingly.
Now... let's sit tight and make the market come to us!
In the mean time, I need your help.
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Until next time...
Russ Schmidt, President
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