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Crude Oil (WTI)


phillo

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Retrace rally looking more likely with an hourly candle close inside the Daily channel.  However I would like to see a small bearish retest of the lower channel line and rally away OR a fresh lower low and rally back inside the channel to be more comfortable.  Ultimately for me I will not be comfortable until I see a breakout of the upper channel line, at which point I will be watching the price action on the retrace for a turn point back into the claws of the Bear.  I am preferring counter trend rally Longs on EURUSD to Oil at present.

Brent-1-hour_141118.thumb.png.52f6975bbd208c60f7162df07d61c8f2.png

 

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Guest PandaFace

Oil is the flavour of the month but it’s getting hammered. Didn’t take a position but was close to! (Or May have been in and out but out the last couple weeks). 

Itchy palms now tho...

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feeling bullish, with the expectation on Saudi to keep releasing bullshitty announcements for the 2-3 weeks before acting. Keeping a close eye on freight rates as the really high freight rates are the only thing that stopped China lifting European barrels, which made the global demand seem subdued incorrectly, and exacerbated the sell off.

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Guest PandaFace

Itchy palms got the better of me and I took a smaaaaallll position out last night. Wish I had seen that bid Nat Gas offer Oil trade @TrendFollower suggested 😂 but now just looking for a reversal over the next three weeks or so - position split in two 30/70 with stop relatively far out for the 30% and just below recent low on the 70. 

WTI price target towards the 70’s with a trailing stop kicking in long distance but small step added. I.e. take into account market vol and gives it space to breath but also pulls it up as the week progresses. 

Expect an interesting few weeks on this one.

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Brent Crude has been messing about a bit for the last week or so, no sudden "buy-the-dips" rally here...  Might see that final leg lower I was sensing yet before a relief rally.  Maybe it could coincide with a similar relief rally on stocks?  Trading counter trend is fraught with difficulty, I'll be interested to watch for an eventual Short set up though...  And to see if there is any correlation with Stocks as we move into a rally phase.

Brent-1-hour_201118.thumb.png.29fadd4adc6488dfeaee8aa098eca757.png

 

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That's because you are a trend-follower, who waits until the trend is well established and then uses super wide stops to attempt to ensure you don't get stopped out but I am a swing trader.  Swing traders also follow trends but wait for pull backs to enter or turns with much tighter stops.  You aren't wrong @TrendFollower, I believe the trend is firmly down too, but neither am I, according to my own method.  If the market doesn't pull back then I will not trade, there are plenty or other opportunities - I don't have to be in Oil.  If I was a serious Oil trader I would have gone Short at the turn off the upper channel line but, like you, I was engaged elsewhere.  I will ONLY trade Oil if I get a significant pullback [as the Americans say "period"] so I will keep looking, and analysing, for that but passively until I see the opportunity.

What is more interesting for me is that we may now have Oil and Stocks entering a Bear phase, with Gold/Silver looking Bullish and possible also USD...  One of the reasons I analyse many different markets is to identify correlations of a long term fundamental nature.

 

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Feels to me like one more leg down to test the bottom channel line (weekly chart line so could push through and back and remain valid) before any possible relief rally.  I need a completed 1-5 wave form ideally and PMD on the hourly to support a bounce off the supporting channel line.  Obviously a confirmed break through means a reassessment but for now I am still expecting a relief rally, markets do not go in straight lines (at least not until strong wave 3s, which this isn't).

For the avoidance of doubt, I am tracking a counter trend rally and NOT suggesting the big picture trend is anything other than down.

Brent-1-hour_211118.thumb.png.7dd8ec432f10861ea1a288ddb5effe0c.png

Edited by Mercury
for to add a final thought
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No doubt @elle, @TrendFollower, but the midterms are over now.  Trump is suggesting it all has something to do with him and his new buddy the King, despite alleged assassination of NY Times journo.  I am sure his own oil producers will not be thanking him and where does he get his tax revenues from?  The Green lobby will be setting their hair on fire as Trump is basically telling gas-guzzling America to get their noses further into the trough, and this aligns to his environmental nay-saying stance.  Quite apart from his lack of concern for long term environmentalism, it is his apparent lack of strategic intent that raises my eyebrows with such utterances.  He seems to have no idea what to do other than keep pushing the America first, America is great ideology that won him the protest election.  He is a one trick pony.

That said, what do I care?  America has to sort out their own mess, we have sufficient to sort out in Europe and UK, especially now that the uber EU-phile, Ken Clark, has come out in favour of May's plan...  I would venture to suggest that he views it as staying in the EU mostly, which it is, but paying 40billion for the pleasure of being a captive downgraded member!  You couldn't make this stuff up!

Now on to actual trading matters, the above tweet from Trump is exactly the kind of thing a contrarian like me looks for as a signal to go the opposite way, well that and all the other signals of course, but this is the cherry on the top.  I would also bet we will see articles from the MSM on why Oil is heading lower from here.  Cue rally!

 

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Quite apart from trading Short, I went Long recently on a potential overshoot set up.  If this concludes with a return back north of the long term supporting trend-line (it will also have done so on the Daily supporting channel-line) then the retrace I have been patiently waiting for will most likely emerge.  Any Long trade would appear to be counter trend and once the retrace is concluded (I am targeting the Fib 62% or a retest of the upper trend-line breakout (price action as always to decide) shorting this market could be on once more for those who missed the previous top and turn.  If this happens then I believe we are in for a long Bearish move, maybe even back to modern days all time lows (inflation adjusted) of 1998.

Brent-Daily_261118.thumb.png.66c88074dbfb9310e637d4f5c243a041.pngInkedcrude-oil-price-history-chart-2018-11-21-macrotrends_LI.thumb.jpg.9622c35b03320e7771ed4379f282fa30.jpgBrent-Weekly_261118.thumb.png.ac5c16d8725efee4cdeac8cb38317619.png

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Didn't get to see the live show, must have been good because Oil started to rally...

Looks to me like we could be about to get that retrace rally I have been seeking.

Technicals:

  • On the Daily chart price looks to have bounced off long term support, this goes back to a Wave A turn down on the previous LT rally (weekly chart), a typically good support/resistance zone from an EWT perspective.  The bearish move down conforms to a 1-5 motive wave (direction of the big picture trend and indicates next move will be counter trend relief rally).
  • We have now had a couple of potential overshoots of the lower channel line (red) and overall the whole move containing these 2 would be an overshoot of the weekly chart LT support line (let's see).  Oscillators are over sold.
  • On the Hourly chart then we can see those 2 overshoots and I have a clean 1-5 count down to the Wave 1 Pink (potential) turning point.  So far the small rally is in a 1-5 (15 mins chart to see this clearly) and there is PMD at the Wave 1 (pink) turning point.

Trading Strategy:

  • I anticipate a small A-B-C bearish move to complete the first 1-2 of the rally at which point a speculative Long trade could be on with stops just below the wave 1 Pink low.
  • Alternatively a Long on break of the over head resistance, once we see the above could be good
  • The most secure would be a break of the upper Daily channel line but stops would have to be wider to guard against a hard retest of the line, although Oil often seems to move fast at such junctures.
  • I would be targeting the Fib 50% initially but the 62% a retest of the LT weekly support line break out could also be a strong candidate.
  • Oh and USDCAD seems to be falling in correlation.

 

Brent-Daily_291118.thumb.png.b25e4d15e974a41068b363172c211605.pngBrent-1-hour_291118.thumb.png.79e0540fe0a37eb6525ee7e9dce69173.png

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I 'm sure many others see these levels. I thought crude would go slightly lower yesterday , as the low in WTI was made outside US trading hours. I still think therefore the low will be tested. There is a lot of support just below in my opinion, so if it were to go lower it would have to either chop through it ( doubtful) or zoom through it.  

Capture brent d.PNG

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