OIH QID and XHB 022007

A few observations tonight. The oil sector has been trading rangebound for a couple of months now. Yesterday, the OIH tried to break out of that weekly base. After trying to move higher early this morning, the stocks in the oil sector lost it. I’ll start looking for shorts if they don’t move higher soon.

We’ve had a bounce in the market. I’m not sure how much of these last few trading sessions have been based around options, but I’m feeling the short side is going to be the right side again here. What I feel doesn’t matter though. The Proshares Ultra Short QID has traded down to just below it’s 20-day moving average today. I’ll be looking for a long QID trade Wednesday if it can gain back some relative strength.

Homebuilder stocks put in sell signals on their daily charts. That game is over though. The charts should start to rebuild around this area. Patience is in play in that sector for now.