A month ago, a relative strength study showed that crude oil could potentially undergo a period of underperformance against the S&P 500 index. The updated chart shows that the underperformance did indeed start shortly after the blog post (see highlighted area in the chart). As a reminder, the relative strength line enjoyed an upward sloping channel this summer, which came to an end at the end of September. After the break took place, a slight rebound was first experienced with a retest of the lower boundary of the channel before a sharp reversal to the downside. At this point, it seems that the underperformance has additional room to go. Lastly, keep in mind that underperformance does not necessary imply that Crude is declining in price but rather that Crude is underperforming versus the performance of the S&P E-mini.You can read more of this blog here.
Is Crude about to underperform the ES again? - October 21, 2013 Update
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