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Has the Oil rally peaked?

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Oil is showing topping signs around 47 handle. If we don't get stronger buying to push this higher then this could be a great short back down to 44.50

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 I think you may be proved right.  Have we just witnessed a clear out of the last bulls?  The volume of that push up was small and so far the volume of the push back is larger, none of it is at all big, all the large volume came ages ago...  is the bull rally running on vapour now?  Stong Neg Mom Div and RSI/Stochastic drop out of over-bought add to the picture.

 

Added to this I still have that tram break and kiss back on the 4 Hourly chart and a break and kiss back of a Triangle on the 15min chart plus now a double top with Neg Mom Div too.  It is Oil so you can't bet the house on it but all in all that is a lot of Bearish indicators.

 

 

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And yet the price rises!  I think it is speculation rather than fundamental that have been driving this rally, a lot of "wise" people have been telling anyone who would stay still for long enough that oil is cheap and should go back to $65 and beyond longer term so get in now, which it looks like a lot of people did back when it was $28-35.  Long term outlook is probably right, until new tech takes over I guess and then the whole market could be a bust, but at some point the supply picture and the economic picture has to come to bear right?

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Yes but that makes perfect sense to me LOL!  Then again I am a contrarian so I love a bit of over exuberance, even euphoria.  Perhaps we can say that the idea of fresh all time highs is euphoria?  As always it is about timing and as we can never time the tops with any accuracy we have to take our chances and manage our risk so as not to loose out shirts and live to fight another day.

 

BTW, do any of you day traders have a view on current moves on stocks?

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It appears, that some oil companies are now hedging their position in case on a significant reversal in the oil price. Because of the recent inventories coming down somewhat due to Canada fires and Nigeria also at a 20 year low and appears Goldman has also become bullish, however they do highlight that recovery in the price will be gradual. I did recently look on the weekly chart and after a while I drawn to the conclusion that we may have seen possibly the ultimate low, I don't dismiss the fact of a possible retracement. The Saudis and Iran are still in conflict and with the hot summer months coming in the are committed to ramping up production as required. I still think that key levels to watch will be that 50% level of which is almost smack on the edge of the tramline, failing that 61% could be an area to exercise caution.

 

BRENT CRUDE DAILY.png

BRENT CRUDE DAILY.png

 

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Goldmans, weren't they calling for $10 oil at one point, or was that Morgan Stanley?  Can't remember.  Smart money is the Oil producers here, they are the only ones who really know what is happening in terms of supply and demand.  I agree with the sentiment in  post, they are showing us the way.

 

In terms of technicals, one way or another, it can't be long now before Oil resolves this current move.  For my money the next move will be down (either a major turn down or a minor in EW3-4 retrace mode).

 



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BTW,  I think that is a few too many parallel tram lines.  They usually only work out to 3 or 4 and then you have to look for a different pattern.  Occasionally you will get more on an hourly chart but not often on a daily.

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Did you know that Goldmans called Oil at $200 before the crash happened in 2008, I got that from Money Week BTW.  Maybe we should be wary when these guys all start calling for the same thing?  Oil may be turning now, too early to confirm but if it does turn from here it is right on the money for me.

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You can never take these Investment Banks too seriously because they have their own agenda and they don't care either way, just like us. The chances of Oil rising at the same bullish rate for the foreseeable future is unlikely. Their are too many current vested interests not to see this oil price rise continue too much, even though they would make more money, it just becomes more of an incentive for shale produces to switch on their taps. With the ongoing uncertainty from china as well and the bears smelling blood for every opportunity in cable, I suspect this will be a complex ride for both oil bulls and bears.

BRENT CRUDE 1H.png

BRENT CRUDE DAILY.png

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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.  

usd cad DAILY.png

 

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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.

 



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Interesting example of the Price Ladder at work re; WTI today and stacked orders currently waiting to sell (from chigrl)  ...

 



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

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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.

BRENT CRUDE 1H.pngBRENT CRUDE DAILY.png

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Excellent advice for traders in general and a specific tip for oil traders.

(RBOB - gasoline and heating oil futures)

 



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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!

 

 

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