Oil Volatility might have a spring in its step!
With the dollar hanging so low these days, Oil has been perking up a bit from its deadened state. The chart you are seeing is the OVX or the volatility chart for Oil. Oil is ready to go somewhere, but where is a hard enough question. August might be rocky considering July's very odd end of the month close, fed week, and earnings time period. The Nasdaq has finally met its match at its super ceiling of approximately 11,070 and there aren't many other places to go. Bulls want to eventually break the bull proof ceiling, but until then, Oil volatility will start to awaken. Oil is very dollar sensitive and right now the Oil Vix is about to have a spring up in its step.
I sat down and labeled out the highest spikes on the chart and the biggest category of oil spikes? Aug, Nov, Dec, and February. August is the hottest month of the year and Nov, Dec, and February are generally winter months so it would make sense that this commodity would be used more. But these are likely the 4 months we would be careful not to get caught in a downtrend.
The common trend between these months as well as any of the months that have smaller spikes on the OVX (meaning down trends) are the first week of the month (the 4th and 7th being common), the middle of the month (the 17th being the most common day) and towards the end of the month in the 20s or seven the 30s. Generally, around the same times the indexes do their thing as well. These spikes are limited and flee as quickly as they come. Some exist for a couple of days, some for one day. Others jump into a trading range. Either way a loose trailing stop might help, but babying your investment might be better. With the volatility, it can go higher on the subsequent days. But for those that hate the mental stress of risk. Grab the money and run. IF it keeps running up. you can always buy more.
I sat down and labeled out the highest spikes on the chart and the biggest category of oil spikes? Aug, Nov, Dec, and February. August is the hottest month of the year and Nov, Dec, and February are generally winter months so it would make sense that this commodity would be used more. But these are likely the 4 months we would be careful not to get caught in a downtrend.
The common trend between these months as well as any of the months that have smaller spikes on the OVX (meaning down trends) are the first week of the month (the 4th and 7th being common), the middle of the month (the 17th being the most common day) and towards the end of the month in the 20s or seven the 30s. Generally, around the same times the indexes do their thing as well. These spikes are limited and flee as quickly as they come. Some exist for a couple of days, some for one day. Others jump into a trading range. Either way a loose trailing stop might help, but babying your investment might be better. With the volatility, it can go higher on the subsequent days. But for those that hate the mental stress of risk. Grab the money and run. IF it keeps running up. you can always buy more.