Light crude oil inventories declined by 1.1 million barrels in the prior week, according to the American Petroleum Institute's weekly status report, but that's quite a bit lower than the 3 million barrel decrease analysts had been expecting. While the price of oil may tick lower on this report, I'd remind potential short sellers that the contract is still trading above the 200-day simple moving average (SMA), as well as the eight-day and 21-day exponential moving averages (EMA).
Several readers asked if I was still stalking Mallinckrodt (MNK) for a short, and the short answer is absolutely. However, as we discussed in the May 12 Trader's Notebook, I don't want to get caught up in the two-way, hyper-emotional chop between the low $50s and roughly $70. So my plan is to wait for a close under the $51 to $53 area. Any such close will also need to display little to no bearish excess, meaning a lower candlestick wick or shadow.
Alcoa (AA), a reader favorite a while back, is trading back against its 200-day SMA. With the year-to-date (YTD) volume weighted average price (VWAP) sitting near $8.80, prospective buyers should keep a close eye on the stock for signs of bearish excess between the current levels around $9.30 and that $8.80 YTD VWAP.
Coffee futures and the iPath Bloomberg Coffee Trust (JO) have certainly come back to life above the 200-day SMA in recent days. I don't currently have a position in JO, but it is back on my watchlist for a favorable risk-to-reward entry. Suffice it to say, coffee bulls do not want to see JO close back beneath $19.25. That level represents the approximate halfway point point between the early-May swing low and the recent swing high. It also lines up nicely with the 50-day SMA.
Any trading or volume profile related questions can be posted in the comments section below, emailed to me at parkcityyeti@gmail.com or posted to my twitter feed @ByrneRWS.
