June 8, 2006
Oil Services Top is Significant and Has Broad Implications
Among the 249 ETFs I follow (well, the computer follows), the Oil Services HOLDR (OIH) was down the most. The trade that I suggested recently is very close to failing, which is a good thing because it makes me sure the highs hit in April (around $160) will mark a significant top, and that my Sentiment Survey, which reveals a remarkably complacent mood, has value. As I said in the comments section at the time:
Eyal: The “tip” will be most valuable if the trade fails, just like the failed trade in TOL which marked the top not just of Toll Brothers but the whole Homebuilders group.
So the failed trade in the OIH may mark the top not just of the Oil Services sector but the broad market as well. I think we’ve seen the highs for 2006, folks. (Famous last words?)
June 8th, 2006 at 8:33 am
I’ve been watching this closely as well. I didn’t take the trade btw. (I use another relative strength timeframe and scale for ETF’s than you). The last OIH trigger was on 04/05/2006 and exit on 05/15/2006.
I didn’t get any long triggers on any ETF since April.
June 8th, 2006 at 8:59 am
Why is the OIH a tell for the market? I remember James Altucher saying that semis went down when oil services went up. That’s certainly been true this year.
June 8th, 2006 at 9:13 am
The OIH has been the strongest sector for ages, a safe haven for momentum players. It can’t be counted on as a refuge anymore now that things are rolling over one by one (see the ETF Trend Table for the Week Ending May 26). The market is a sum of the parts and if the strongest link goes weak, then…. Did I mix enough metaphors? ;-)
Does Altucher have a blog?
June 8th, 2006 at 10:13 am
CM you might be right. My model shows the potential for another 7%ish decline is quite possible. Famous last words?
June 8th, 2006 at 11:57 am
Tom: It may just go into a multi-month holding pattern and we’ll both be right. ;-)
June 8th, 2006 at 5:41 pm
reg OIH..on the chart you can see that the volume has gone up on every correction, a classical distribution process… i guess, that there are a lot of people now sitting on this with a build up avg price on their position getting nearer and nearer to the current price…an explosive situation
the best you can say is, that OIH is in for an A-B-C type of correction now
June 8th, 2006 at 7:32 pm
Peter: I agree that it’s shaping up to be a classic ABC correction, but my sixth sense is telling me to stick a fork in it.
June 8th, 2006 at 10:25 pm
yes, nobody wants to hear it, but sixth sense is what separates the…from the… (fill in what you like to)
im already chasing a top in euryen, so i wait for OIH to break below 142 first and decide then… (-:
June 9th, 2006 at 8:44 am
^OSX was the best NSO% index in my watch list today.
June 9th, 2006 at 9:27 am
Bill: Among the active ETFs I follow, the EWZ (Brazil +3.09%) and the XLE (Energy SPDR +2.14%) both outperformed (NSO%) the OIH (Oil Services HOLDR +2.03).
September 11th, 2006 at 10:11 am
[…] If you haven’t sold some of the Oil Service HOLDR (OIH) and the Energy SPDR (XLE), you might think about it here. You may recall my June 8 post Oil Services Top is Significant and Has Broad Implications in which I speculated the OIH had topped around $160. I was right about the top but probably got the broader implications wrong — money is just rotating out of the Energies and into beaten down areas like tech. […]