The Art of Patience.....
In trading you can chase price all over the place or you can WAIT!
I have been saying that in Oil it is likely to tank. Very likely. You can find it on my oil blog as a reference point. The 54-55 area has been solid for the past few months rejecting price over and over again. Couple that to a rising wedge pattern which you see below and you can see 80% of the time it breaks away from the trend. Well NOW could be the time to jump in. Maybe or maybe not though. I don't trust the algos and this market is highly manipulated. Now everyone is on the bullish side which includes the hedge funds in record numbers so as I have been intently watching the COT statistics week after week there are still records longs.
The pattern is doing what it is supposed to if you are curious. What is means is that as price remains lofty more and more longs keep coming into the market. Much like the indexes at the moment as NOW mom and pop are off the sidelines. They are fully invested. Ok good but that usually signals a temporary top at the very least which is what I think is happening with oil. Now this may hick up down and then quickly reverse as it could be a head fake which has happened over and over again to gain traction to move higher. You know a nice move down followed by an even faster reversal. When you look back at the Macro trend of oil it is still down. Very much so. If you are looking for a powerful reversal pattern where you have a good impulse leg moving in the opposite direction we NEVER had that like in 2008-9 when oil staged a powerful move back up to the 110 area after plunging from the 147 area. These are more like corrective waves in a sideways movement before reasserting the main trend. That is all it has really been since 2015-16. Now the main trend line is more around the 45-47 area so you will have to see if this area holds before you get too excited about retesting the 25 lows.
However could I see a move to the 40 area or lower?
Absolutely to clear out all the weak and overextended longs.
On the reverse side if it is a head fake it won't go much above 62 so your upside is very limited while your downside could be very large. The 40 area is a key area too and I would be surprised if the powers that be let it fall too far or stay too long below here. However they may not have any choice so time will tell. This market holds a lot of money for the commercial traders so well see the two charts below and make your own decision. I personally have been shorting from the 54 area for a while now. I keep getting bounced back out after minimal profits but this might be the ticket? Time will tell.
I have been saying that in Oil it is likely to tank. Very likely. You can find it on my oil blog as a reference point. The 54-55 area has been solid for the past few months rejecting price over and over again. Couple that to a rising wedge pattern which you see below and you can see 80% of the time it breaks away from the trend. Well NOW could be the time to jump in. Maybe or maybe not though. I don't trust the algos and this market is highly manipulated. Now everyone is on the bullish side which includes the hedge funds in record numbers so as I have been intently watching the COT statistics week after week there are still records longs.
The pattern is doing what it is supposed to if you are curious. What is means is that as price remains lofty more and more longs keep coming into the market. Much like the indexes at the moment as NOW mom and pop are off the sidelines. They are fully invested. Ok good but that usually signals a temporary top at the very least which is what I think is happening with oil. Now this may hick up down and then quickly reverse as it could be a head fake which has happened over and over again to gain traction to move higher. You know a nice move down followed by an even faster reversal. When you look back at the Macro trend of oil it is still down. Very much so. If you are looking for a powerful reversal pattern where you have a good impulse leg moving in the opposite direction we NEVER had that like in 2008-9 when oil staged a powerful move back up to the 110 area after plunging from the 147 area. These are more like corrective waves in a sideways movement before reasserting the main trend. That is all it has really been since 2015-16. Now the main trend line is more around the 45-47 area so you will have to see if this area holds before you get too excited about retesting the 25 lows.
However could I see a move to the 40 area or lower?
Absolutely to clear out all the weak and overextended longs.
On the reverse side if it is a head fake it won't go much above 62 so your upside is very limited while your downside could be very large. The 40 area is a key area too and I would be surprised if the powers that be let it fall too far or stay too long below here. However they may not have any choice so time will tell. This market holds a lot of money for the commercial traders so well see the two charts below and make your own decision. I personally have been shorting from the 54 area for a while now. I keep getting bounced back out after minimal profits but this might be the ticket? Time will tell.
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