Has the Oil rally peaked?

[donaldprice]

Been interesting trading dollar cad recently, ironic that despite the despite the increase in oil prices, the USD CAD bears seem to have lost control for the moment and a nice ABC pattern immerged this morning, purely irresistible, however will be watching a close eye on that approaching pivot point, but sooner no doubt because about to hit my 2nd tramline.  

 

[Mercury]

Hi  In general I agree with you assessment however an A-B-C normally has the wave C closing beyond the Wave A terminus, unless it is a complex wave, which usually occurs in a 3-4 stage rather than an 1-2.  On my chart below you will see 2 possible scenarios (there may be others).  Either we had a small retrace and have begun the next wave up, which if Oil does break down is plausible or we haven't completed the A-B-C (red labels) yet.

 

WRT to the Oil CAD relationship, of course it is not 1:1 and USD is a big factor too.  Against other currencies USD had been strong and so this may have offset Oil impacts, thought reversed of late but just as Oil appears to be topping out too.

 



[Guest Rich88]

Oil holding in tramline. Looking to buy if this doesn't break

[donaldprice]

My analysis of Brent crude, especially after todays OPEC meeting, is that oil could retrace to the second tramline which would be around 61% fib level, however if that where the scenario this would be W2 and then we could see a bullish trend that would surpass the weekly tramline. If you also notice the momentum is diverging and therefore bullish momentum is softening at the moment.

[Mercury]

Been waiting for today's Oil stock data before posting my latest musings on Oil.  I remain bearish, if for no other reason than if you say something long enough at some point you will be right...

 

Having said that I see another leg up before any bearish move takes hold firmly.  My Weekly chart has not changed in terms of where I have always seen the market: that we have not yet seen the bottom; that we are in a 3-4 retrace of a final large scale wave down and that Brent could reach the $20 level on the next run down.

 

On the Daily it looked as if a touch on the lower green tram might happen but post crude stock data perhaps the 4hourly and hourly charts will prove more powerful and drive prices back up with the strong Pos Mom Div in evidence on both.  My target for the end of the retrace rally is in the region of $55 and if we get a turn there the next stop could be $20!

 

 

[Mercury]

For those Fundamentalists (HaHa) among you, this from Hedgeye.com