Oil: I Don't Trust Goldman Sachs
Mike Paulenoff | Sep 11, 2015 03:41PM ET
Truth be told, I have a tough time reconciling the reaction to Goldman Sachs' (NYSE:GS) $20 fundamental scenario with my near- and intermediate-term technical set-ups.
I would have thought NYMEX oil could be down considerably more than it is -- or has been -- so far.
At its weakest, oil hit a low of $44.16, down 3.5%, but as I type, it's down 1.8% in the aftermath of a very-bearish report from GS.
What's intriguing is that oil remains within the confines of a digestion period between $49 and $43, in the aftermath of it sharp late August up-move from $37.75 to $49.33.
The price pattern off of the 8/24 low, coupled with the positive juxtaposition of two of my underlying momentum gauges, suggests strongly that oil is in the midst of an incomplete recovery rally that has unfinished business to the upside once the contained digestion period runs its course.
The fact that the GS report has not triggered a break beneath the digestion-period lows ($43.20) is a sign of impressive relative strength -- so far.
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