The Cup & Handle pattern

I just returned from the Caribbean and after spending 7 days and nights on a sailboat – I am still a little land sick

They say a picture is worth a thousand words so I will let the chart do the taking

According to Stockcharts.com - the Cup with Handle is a bullish continuation pattern that marks a consolidation period followed by a breakout. It was developed by William O'Neil and introduced in his 1988 book, How to Make Money in Stocks.

OK – enjoy the picture

Some good gassy news:

I was away for a week and got back just in time to see some goods news for the Canadian energy sector.

In the last post we looked at the US 10-yr T-bond yields at 1.76% and the Select SPDR Energy ETF (XLE) which was breaking up and out of a large bullish symmetrical triangle. Now today’s good news on the U.S. allowing LNG exports has got the natural gas producers participating to boost the broader energy sector ETFs. The TSX was closed today but in the U.S inter-listed Canadian gassy CNQ and ECA jumped about 5% so look for our TSX listed iShares S&P/TSX Capped Energy Index Fund (XEG) to have a big up day tomorrow. Also that big bullish reversal on gold was good news for the battered gold stocks

Thanks to StockCharts for the Monday action on CNQ

Bonds are for Fools:

In the last post we looked at two U.S. integrated energy giants, Chevron Corporation (CVX) and Exxon Mobil Corporation (XOM) which have over the past 36 months been building huge bullish ascending triangles.

Now a look at the US 10-yr T-bond yields at 1.76 % (divide the scale by 10) plotted over the Select SPDR Energy ETF (XLE) displays two conditions. There is high price correlation and there is high cyclic commonality. Clearly the XLE is breaking up and out of a large bullish symmetrical triangle and so it is reasonable to assume the US 10-yr T-bond yields have nowhere to go but up. Long bonds are for fools so look for the iShares Barclays 20+ Year Treas Bond (TLT) $120.35 to break down through the 200 day MA down the at least $109 to complete a huge head & shoulders top.

Big Oil Breaks Out

A few post ago I looked at CME gold and the large descending triangle which is a bearish reversal pattern. We saw gold complete a typical A-B-C type correction. as  detailed from the price peak and a zigzag down to (A) then zigzag up to (B) and then the collapse down to the final killer wave at (C).

This post we look at two U.S. integrated energy giants, Chevron Corporation (CVX) and Exxon Mobil Corporation (XOM) which have over the past 36 months been building huge ascending triangles. The ascending triangle is a bullish pattern. It can signal the continuation of an upward trend or is can signal a positive reversal of a down trend. The other rule is the measured move which in the examples of our two energy giants seems to be considerable. Can you estimate the measured moves in today’s chart?