CRUDE OIL REACHES HIGHEST LEVEL IN FIFTEEN MONTHS WHICH IS BOOSTING ENERGY SHARES -- OIL SERVICE ETF IS TESTING 2013 HIGH -- SCHLUMBERGER IS BREAKING THROUGH MAY RESISTANCE -- INTEGRATED OIL & GAS INDEX HITS RECORD HIGH

CRUDE OIL REACHES 15-MONTH HIGH... Chart 1 shows Light Crude Oil trading at the highest level in fifteen months. My July 5 message showed crude oil trading higher in an attempt to close the gap between it and higher priced brent crude. As of today, crude is only a dollar away from its European counterpart. With oil prices on the rise, investors appear to be showing new interest in energy stocks. My July 8 message showed the Market Vectors Oil Services ETF (OIH) moving up toward its 2013 highs. Chart 2 show the OIH very close to challenging its May peak. Its relative strength ratio (gray area) has also started to climb since June. That same message showed upside breakouts in Baker Hughes (BHI) and National OIlwell Varco (NOV). Today's upside breakout belongs to Schlumberger (SLB). Chart 3 shows SLB trading over its spring high with a rising relative strength ratio. SLB is also the largest holding in the OIH.

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Chart 1

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Chart 2

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Chart 3

INTEGRATED OIL & GAS INDEX HITS NEW RECORD ... Chart 4 shows an even stronger chart pattern belonging to the Dow Jones US Integrated Oil & Gas Index which has exceeded its May peak. [In fact, the index is trading just above its 2008 peak which also puts it at a record high]. One of the reasons for that stronger performance is Exxon Mobil (XOM). The daily bars in Chart 5 show XOM trading at a new 52-week high today. Its relative strength ratio (gray area) has just started to increase. The weekly bars in Chart 6 show Exxon Mobil having already exceeded its 2008 high to trade at a new record. [XOM is the largest stock in the Energy SPDR (XLE)].

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Chart 4

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Chart 5

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Chart 6

CONOCOPHILLIPS AND EOG ALSO HIT NEW RECORDS... Two other leaders in the integrated oil & gas group are also hitting new record. The weekly bars in Chart 7 show ConocoPhillips (COP) trading well above its mid-2008 peak. Its relative strength ratio (gray area) is also starting to rise. Chart 8 shows EOG Resources (EOG) having also exceeded its 2008 peak. Its relative strength ratio is rising as well. Energy has been one of the market's weaker stock sectors this year. With the price of crude on the rise (along with gasoline and heating oil), investors may be starting to nibble in the energy patch. Natural gas has been the weakest energy market. A national heat wave is also giving a boost to natural gas prices (because of its use in air conditioning).

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Chart 7

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Chart 8

BOTH DOW AVERAGES HIT NEW HIGHS TOGETHER... Today's list of stock indexes in record highs include small and midcap stocks, the S&P 500, Dow Industrials, and Dow Transports. Chart 9 shows the Dow Industrials closing above its May intra-day high at 15542. That resumes the Dow uptrend. Chart 10 shows the Dow Transports having an even stronger day (+1.65%) and closing above its May peak as well. That puts both Dow averages in record territory. As we've written many times before, it's always a good sign to see the Dow industrials and transports hitting new highs together. According to Dow Theory, that's a necessary ingredient in an ongoing bull market.

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Chart 9

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Chart 10

DBE...