XOM Follow Up -GREAT Position

In case you didn't like options, I suggested you maybe consider ERX as a leveraged way to play the counter trend moves in XOM, although I prefer XOM over ERX (not because of the amount of leverage, strictly because of the signals, but I can't think of an ETF that is as close to XOM as ERX-"3x Energy Bull").

The last follow up for XOM was this "XOM Follow Up / Add-To" post of Tuesday October 8th.

In that post I included this chart that shows where XOM was a core equity short, where that short was covered in anticipation of a counter trend bounce, where XOM calls were entered including the same day as the core short being closed and where the calls were closed and the P/L report for each, that's this chart, just add Tuesday as an additional new entry or add-to for the last call position that was opened (and remains open).

 This is a daily XOM chart, the red "S" is where the core short was covered for a +5% gain, it never really got a chance to get going, but I will be re-entering XOM as a core equity short on price strength, it's actually near the top of my core short list. 

The white "C" the same day was a call position opened, the following red "C" is part of that call position being closed (the linked original post describes the positions in more detail) and the gain, etc.

This is the 1 min intraday, that alone is enough to consider closing a call position, depending on the expiration and strike obviously, a November expiration vs next Friday are two very different scenarios.

There's some migration, the 2 min today is also negative which increases the probabilities of a pullback through price rather than a consolidation through time  (1 min only negative is 50/50 chance of either, add the 2 min negative and probabilities of a pullback go way up).

The 3 min chart  shows the reason why I featured XOM as an add to on the 9th, you can also see today's action, negative, but not horrible, more of an intraday/short term issue.

The 5 min is nearly perfectly in line, however the price action looks a little too parabolic for me, which means I'd expect the charts in the intraday space to continue to deteriorate until there's a pullback in XOM, this may be a great opportunity for anyone who would like to start a new "speculative"/"swing" long or add to an existing position.

The 10 min chart is clearly positive enough to take XOM quite a bit higher from here, of course nothing moves straight up and thus the reason I brought up the subject of what to do with calls earlier.

I don't really need to go further than the 15 min chart, which suggests a fairly strong move, I wouldn't be surprised (since 3C is at a new leading positive high) to see price make a new high for this chart before all is said and done. I have a very specific area I'm watching to add XOM back to the core short (equity short for a trend trade) portfolio.

Again, this 2 hour chart is an extremely strong chart/signal, we see the distribution at the top when XOM became a core equity short, at #1 in white where the XOM short was covered in anticipation of a counter trend rally and call positions opened and as we have made a lower low, we have a stronger leading positive divegrence, this helps me in determining how far I think XOM can go before running out of gas.

This is a multi-day chart, these are stronger signals than anything you have seen in this entire post, probably all day. The distribution in 2007 was very strong and this is what distribution use to look like before the F_E_D got involved in the market to the extent they did in late 2008 and ever since.

You can clearly see the market wide accumulation of Q1 2009 and through 2009 as F_E_D / F_O_M_C policy was more aggressive, adding treasuries to their MBS QE program that was started late 2008, adding T's was the trick.

The leading negative divegrence in place right now is stronger than anything we have seen in years because the market is built on a sand foundation of easy money that HAS to be unwound, that's what the taper process starts, the unwinding of accommodative policy which is always much trickier to exit than to enter and always has dire consequences for the market. Being we've never seen this amount of accommodative policy and a F_E_D balance sheet so bloated, I don't think anyone can imagine how bad this can actually be once they start raising rates.

In any case, the upside XOM target I'm looking for to start a new core short position is above the parallelogram defined by the red trendlines, IT IS NOT A BULLISH CONSOLIDATION!

I'm looking for a move somewhere > $96, $100 would be an obvious psychological level which also means this is about my expectation for our long positions moving forward.

Mor than anything, you just need to decide what trades you are comfortable with a there are quite a few available here in different timeframes at different areas/levels, but I would not miss the core short >$96-$100-ish.