The Chesapeake Watershed Moment Approaches

With earnings coming up on November 4th, energy firm CHK remains notably weak today. 

On the daily chart, updated below, note the recent bounce has not done much to inspire confidence in any type of discernible technical bottom, quite yet. Moreover, the risk of a few visible bankruptcies in the energy space, not unlike coal, is very much in play given the established bears market forces not yet overturned for a new bull run (the new bull may indeed be underway, but we would need to see far more technical evidence out of crude and energy stocks to confirm). 

I still view HYG and JNK, the high yield and junk bond ETFs, as being good litmus tests as to imminent bankruptcy risk in the sector, given how many energy firms are housed in those ETFs. At the moment, HYG and JNK are holding back over the 50-day moving averages. But if the highlighted CHK channel, below, follow-through lower I suspect some panic will come back into the energy markets. 

USO holding $14 is another piece of the puzzle, as well as oil service giant SLB holding $77.40, a level price is flirting with as we speak.

As for natural gas and the weakness there, I will discuss what to look for with Members in my usual Midday Video.