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Crude oil's decline from 82.97 extended further as expected last week and continued to sustain below the short term rising trend line. Initial bias remains on the downside this week for 71.09 support next. As discussed before, whole rebound from 64.23 should be finished at 82.97 already. Break of 71.09 will confirm this case and target another low below 64.23. On the upside, above 76.63 resistance will suggest that a short term bottom is in place, possibly with bullish convergence condition in 4 hours MACD. Stronger recovery would be seen in this case. But after all, risk will now remain on the downside as long as 82.97 resistance holds.
In the bigger picture, choppy rebound from 64.23 is treated as a correction to fall from 87.15 only and has possibly finished at 82.97 already. Break of 71.09 will confirm this case and also indicate that whole fall from 87.15 is resuming for 60 psychological level, (50% retracement of 33.2 to 87.15 at 60.18, 100% projection of 87.15 to 64.23 from 82.97 at 60.05). Decisive break there will indicate that fall from 87.15 is developing into a powerful impulsive wave and would target 33.2 low. On the upside, even in case of another rise, focus will remain on reversal signal as crude oil enters into resistance zone of 82.97/87.15.
In the long term picture, current development suggests that rebound from 33.2 is finished at 87.15, inside 76.77/90.24 fibo resistance zone as expected. Our view is that fall from 87.15 would develop into the third falling leg of the whole correction from 147.27 and hence, we'd anticipate an eventual break of 33.2 low in the long term as such correction extends.
Crude oil was lower overnight as it extends this month's decline. Stochastics and the RSI are oversold but are neutral to bearish signaling that additional weakness is possible near term.
If September extends the aforementioned decline, the 75% retracement level of the May-August rally crossing at 72.96 is the next downside target. Closes above the 20 day moving average crossing at 78.24 would confirm that a short term low has been posted.
First resistance is the 10 day moving average crossing at 76.49
Second resistance is the 20 day moving average crossing at 78.24
Crude oil pivot point for Friday morning is 75.19
First support is the overnight low crossing at 73.25
Second support is the 75% retracement level of the May-August rally crossing at 72.96
Sure oil prices and petroleum prices rebounded after the Department of Energy’s Energy Information Agency week over week numbers we not quite as bearish as the American Petroleum Institute report. And yes, oil rebounded as the stock market became positive. Yet there was something lost when we looked at only the daily factors. Did anyone step back and ponder that the total U.S. inventory of oil and all petroleum products hit a 27 year high according to the EIA?
Now just stop and think where the price of oil was 27 years ago and what kind of world we lived in 1983. Some things were different but some are the same. Ronald Regan was president and had just lifted wage and price controls on oil. It was the first year that the NYMEX had offered futures contracts on crude, the price per barrel was hovering around $30 a barrel. We were just emerging out of the of a 4 year recession that saw rapid job destruction and an unemployment topped out at 10.8%. Sound familiar.....Read the entire article.
Crude oil was higher due to short covering overnight as it consolidates some of this month's decline. Stochastics and the RSI are oversold and are turning neutral to bullish signaling that a short term low might be in or is near.
Closes above the 20 day moving average crossing at 78.59 would confirm that a short term low has been posted. If September extends the aforementioned decline, the 75% retracement level of the May-August rally crossing at 72.96 is the next downside target.
First resistance is the 10 day moving average crossing at 77.36
Second resistance is the 20 day moving average crossing at 78.59
Crude oil pivot point for Thursday morning is 75.00
First support is Wednesday's low crossing at 73.83
Second support is the 75% retracement level of the May-August rally crossing at 72.96
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Below are a few charts of the trend and my short term forecast.....
GLD – Gold Bullion ETF
As you can see gold broke out of its support zone this week and popped into the next resistance level. This is very typical price action in the stock market. It is important to look at the price charts like an apartment building. It’s nothing but a bunch of floors and ceilings.
How it works; if a ball breaks though a floor it will naturally fall to the next floor and bounce. The same for if a ball breaks through a ceiling, it will hit the next ceiling then bounce back down. This is essentially how the market moves.
SLV – Silver ETF
Silver is forming a large pennant and nearing its apex. With the amount of volume traded within this large volume channel I would expect a sharp breakout once a direction is made.
USO – Oil Traded Fund
Crude oil had a funky day. Early Wednesday morning in pre-market trading we saw virtually every investment drop at the same time which was strange. Anyways the US dollar dropped sharply and oil when down also. Normally as the dollar drops oil rockets higher but that was not the case today.
Currently oil is trading between two trendlines and is trying to hold up. If we get a breakdown then we could see a sharp drop in oil over the next 1-2 weeks.
SPY- SP500 ETF Trading Fund
The SP500 is trading within a high volume channel, similar to silver. Once a breakout in either direction is made I would expect a sizable move lasting a few weeks.
Mid-Week Commodity and Index ETF Report
In short, the market looks bearish for the short term of 5-10 trading sessions. This is because everything looks to be trading near resistance levels. That naturally brings sellers out of the woodwork putting pressure on prices.
Silver and gold stocks tend to lead the metals sector on breakouts so it will be important to keep an eye on them as we near a possible breakout or breakdown in the metals. If you see SLV or GDX ETFs out performing the GLD gold fund by 2-3x then I would expect to see gold move higher later that session or the following day.
The US dollar trend usually helps to identify if oil will have downward pressure or not. Also energy stocks tend to lead the price of oil by a few hours and some times a day. I keep an eye on XLE energy etf for a feel of how the energy stocks are doing and also UUP US dollar fund.
As for equities tech, financials and the Russell 2K (small cap stock) tend to lead the way for the broad market. Watching XLK, XLF and IWM help to confirm breakouts.
Crude futures dropped below $74 Wednesday, hitting five week lows as equities fell and data from an industry trade group showed large builds in already high U.S. oil inventories. Light, sweet crude for September delivery recently traded $1.61, or 2.1%, lower at $74.16 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded $1.29 lower at $75.64 a barrel.
Late Tuesday, the American Petroleum Institute, an industry trade group, said oil inventories rose by 5.8 million barrels last week, while stocks gasoline and distillates, which include heating oil and diesel fuel, rose by around 2 million barrels each. The unexpected rise in inventories combined with falling equities Wednesday morning to push crude to the lowest level since July 7. The Dow Jones Industrial Average was recently down 48 points to 10357.
Growing stockpiles suggest that demand for oil and oil products is having trouble keeping up with supply, a worrying prospect for a market already flush with crude. Stockpiles at the Cushing, Okla., delivery point for Nymex benchmark crude are inching closer to record levels set in May. And inventories of gasoline remain above five-year averages amid the important U.S. summer driving season.
The Department of Energy is set to report its own statistics on inventories at 10:30 a.m. EDT Wednesday. These more influential data are expected to show a 1.3-million-barrel decline in crude stocks, according to a Dow Jones Newswires survey of analysts. Gasoline stocks are seen falling by 500,000 barrels, while distillate inventories are expected to grow by 1.2 million barrels.....Read the entire article.
Crude oil was lower overnight as it extends this month's decline. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term.
If September extends the aforementioned decline, the 75% retracement level of the May-August rally crossing at 72.96 is the next downside target. Closes above the 20 day moving average crossing at 78.74 would confirm that a short term low has been posted.
First resistance is the 10 day moving average crossing at 77.94
Second resistance is the 20 day moving average crossing at 78.74
Crude oil pivot point for Wednesday is 75.80
First support is the overnight low crossing at 74.69
Second support is the 75% retracement level of the May-August rally crossing at 72.96
The early market action on Monday, August 16th, triggered a key weekly "Trade Triangle" to the downside. Our weekly "Trade Triangle" turned red, indicating that all trends are negative and now pointing lower.
In this new 90 second video we show you some of the scenarios we can see playing out for the S&P 500. I think you'll find this new video informative and educational. You will also come to understand the power of our "Trade Triangle" technology.
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