1. For weeks, we have been waiting on light crude oil futures to break above the eight-day exponential moving average (EMA), and that break finally came during Thursday's session. Now, before anyone gets too excited, let's remember the eight-day EMA is our shortest timeframe moving average. So as trend changes are concerned, only the shortest of timeframes is showing reversal potential.
Traders looking at crude from the long side should consider using $41.20-$41.50 as a downside support zone. And as far as resistance is concerned, I want to use $50-$51.25 as a major upside target (I know that seems like a stretch). The 21-day EMA and 50-day SMA can be used as dynamic reference points.
2. With the 200-day simple moving average sitting around 4380, you can bet traders will be quick to run to the E-Mini Nasdaq 100 futures (Nq) and PowerShares QQQ Trust (QQQ) on the slightest hint of supply re-entering the market.
3. Who'd have thought coal stocks would become a flight to safety? I'm obviously joking. But if you look at Peabody Energy (BTU), it, along with Arch Coal (ACI), are rallying impressively hard. To be clear, I regard both these names as scratch-off lotto tickets within a hated and seemingly doomed industry. Nonetheless, they continue to be in play, and day timeframe traders are flocking to the names.
4. I've received several inquiries over the past few days regarding stocks, primarily in the energy and materials sectors, trading under one or two dollars. Please know I generally regard anything trading near a buck as a scratch-off lotto ticket, and nothing more. If something is trading under a dollar, there's a good chance it's severely distressed and unlikely to survive (such as the coal stocks). If you deal in these types of stocks, please know you're fighting a dangerous, and incredibly steep, uphill battle.
Any trading or volume profile related questions can be posted in the comments section below, emailed to me at firstname.lastname@example.org or posted to my twitter feed @ByrneRWS.