I Require Context

Too often we look at stocks in a vacuum, moving in the immediate aftermath of a major news event in lieu of the prior context of those charts. In doing so, we miss out on clues as to whether the stocks and sectors were already raring to go for a significant breakout or, instead, have been merely aimlessly flopping around or in a trend opposite of the news-related move, seemingly destined to revert to that prior price action after the dust settles. 

In the current tape, we have the Maduro/Venezuela news sending oil stocks initially much higher. As I write this, the oil services remain firmly green on the day in the OIH ETF. The wildcatters, however, are now red, in the XOP ETF. And large cap integrated in the XLE ETF are modestly higher. 

Chevron, below on the quarterly chart, already had a presence in Venezuela. It is a name I have owned and added to inside the VIP service with Members for long-term plays. A significant reason, technically, for my bullish CVX view has been the quarterly chart setup, with a multi-year bull flag after the initial post-pandemic rally. Of course, the dividend and Warren Buffett seal of approval do not hurt the cause. 

But Chevron seems like a classic example of a major news event advancing what was already set in motion: A multi-year bullish setup on the cusp of uncoiling higher for an out of favor, underweight sector for most. I am looking for a move above $170 now to confirm this breakout. 

The other standouts today are once again the precious metals and miners. Although there has been no outright panic or even an inkling of it from The Fed, the precious metals are still sending a message that a rate cutting regime is inappropriate.