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US - Oil & Gas Stock Index (XOI) - Possible Temp Low »» Weekly Summary Analysis
By: Marty Armstrong | July 24, 2021

Oil & Gas Stock Index closed today at 100057 and is trading up about 26% for the year from last year's settlement of 79248. Immediately, this market has been rising for 2 months going into July reflecting that this has been only still a bullish reactionary trend. As we stand right now, this market has made a new low breaking beneath the previous month's low reaching thus far 95821 while it's even trading beneath last month's low of 108259.


ECONOMIC CONFIDENCE MODEL CORRELATION

Here in Oil & Gas Stock Index, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2020 and 1994. The Last turning point on the ECM cycle high to line up with this market was 2018 and 2001.


MARKET OVERVIEW
NEAR-TERM OUTLOOK

While the historical perspective of the of this market included a decline from the major high established back in 2014 moving into a major low in 2020, the market has bounced back for the last year. The last Yearly Reversal to be elected was a Bearish at the close of 2020.

This market remains in a positive position on the weekly to yearly levels of our indicating models.

Looking at the indicating ranges on the Daily level in the Oil & Gas Stock Index, this market remains moderately bearish position at this time with the overhead resistance beginning at 101033 and support forming below at 95821. The market is trading closer to the resistance level at this time.

On the weekly level, the last important high was established the week of June 21st at 117629, which was up 9 weeks from the low made back during the week of April 19th. We have been generally trading down for the past 4 weeks, which has been a very dramatic move of 18.53%.

Immediately, this decline from the last high established the week of June 21st has been important closing sharply lower as well. Before, this recent rally exceeded the previous high of 104077 made back during the week of March 29th. Nonetheless, that high was actually lower than the previous high made the week of March 8th suggesting this market has really been running out of sustainable buying for right now. This immediate decline has thus far held the previous low formed at 95476 made the week of April 19th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action. Looking at this from a wider perspective, this market has been trading up for the past 4 weeks overall.

INTERMEDIATE-TERM OUTLOOK

YEARLY MOMENTUM MODEL INDICATOR

Our Momentum Models are declining at this time with the previous high made 2016 while the last low formed on 2020. However, this market has declined in price with the last cyclical low formed on 2020 warning that this market remains weak at this time on a correlation perspective declining in both price and Momentum.


Interestingly, the Oil & Gas Stock Index has been in a bullish phase for the past 8 months since the low established back in October 2020.

This market is trading well beneath that high of June which was 117629 by more than 10 percent. Critical support still underlies this market at 90360 and a break of that level on a monthly closing basis would warn of a further decline ahead becomes possible. Nevertheless, at this time, the market is still weak trading beneath last month's low.

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