Oil Level To Watch...
As I mentioned before Oil is caught in a range. It is not likely to change for a long time. So we have a general move down from the 50.33 area over the past few days which gives the impression of course that we are forming a triple top for a move down lower. In short I don't think so. My analysis is generally based on the simple fact that you need to see the set up to be profitable. In other words the old poker phrase stands true, just as it does in all markets.
What is that phrase?
Simply put, "If you can't see the sucker at the table it is likely YOU and you probably shouldn't be playing that game or at least betting strongly".
It is precisely the same for the markets. Tomorrow of course is the Oil Inventory Report at 1030 eastern time and it should be a lovely time to pick a reversal point. I personally am looking at the 48.85 area or slightly lower. This volume area should hold price regardless of the spike. While oil could move to higher highs in the overnight session I would look somewhere in this area for price to hold and to reverse past the 50.33 area getting the stops and perhaps heading to my target at 51.20. As you know 48.33 is the mid point pivot where the major players have been pushing price for the past three years. It neither goes to far above or to far below this area. It almost always returns to this area.
That is the nature of a sideways market. You first must see where the area is that is the mid point volume area where the big players push the price around. 80% of the time or more the price will at some point return to this area. That is the nature behind the movement in the oil market at the present. Price will need to break into a trend at some point to nullify this area. I wouldn't look for that to happen any time soon. Say oil hickups to the 55 area or more. You can rest assured at some point it will return to the 48.33 area when bullish sentiment is at its most extreme. On the other hand if it dips down to say 40 or slightly less it will be pulled back to the 48.33 area to get the bears when that too becomes an extreme.
You can see by the chart below I have defined this area for you on the weekly chart. It is pretty clear if you look back and observe price. For example in today's futures market the 50.20 area was the major volume area where price was gyrating from back and forth until it broke down shortly after the open. It never ceases to amaze me how traders look for all sorts of useless indications that price is going to move one way or the other. Especially on the smaller time frames. So far we do NOT have a winner in price. The bears and bulls have not determined a directional bias or trend in over three years since 2014. Oil will likely no longer be the energy of choice before any new direction is determined. If that is the case you can expect it to return to 10.00 a barrel or less over the next five to ten years.
What is that phrase?
Simply put, "If you can't see the sucker at the table it is likely YOU and you probably shouldn't be playing that game or at least betting strongly".
It is precisely the same for the markets. Tomorrow of course is the Oil Inventory Report at 1030 eastern time and it should be a lovely time to pick a reversal point. I personally am looking at the 48.85 area or slightly lower. This volume area should hold price regardless of the spike. While oil could move to higher highs in the overnight session I would look somewhere in this area for price to hold and to reverse past the 50.33 area getting the stops and perhaps heading to my target at 51.20. As you know 48.33 is the mid point pivot where the major players have been pushing price for the past three years. It neither goes to far above or to far below this area. It almost always returns to this area.
That is the nature of a sideways market. You first must see where the area is that is the mid point volume area where the big players push the price around. 80% of the time or more the price will at some point return to this area. That is the nature behind the movement in the oil market at the present. Price will need to break into a trend at some point to nullify this area. I wouldn't look for that to happen any time soon. Say oil hickups to the 55 area or more. You can rest assured at some point it will return to the 48.33 area when bullish sentiment is at its most extreme. On the other hand if it dips down to say 40 or slightly less it will be pulled back to the 48.33 area to get the bears when that too becomes an extreme.
You can see by the chart below I have defined this area for you on the weekly chart. It is pretty clear if you look back and observe price. For example in today's futures market the 50.20 area was the major volume area where price was gyrating from back and forth until it broke down shortly after the open. It never ceases to amaze me how traders look for all sorts of useless indications that price is going to move one way or the other. Especially on the smaller time frames. So far we do NOT have a winner in price. The bears and bulls have not determined a directional bias or trend in over three years since 2014. Oil will likely no longer be the energy of choice before any new direction is determined. If that is the case you can expect it to return to 10.00 a barrel or less over the next five to ten years.
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