WTI remains one of the markets I am watching closely as price approaches a key higher-timeframe area.
From a technical perspective, my overall bias remains bullish. After breaking out of the major descending structure, WTI found strong demand around $68–74, where the weekly gap, ascending trendline and HTF demand converged. The reaction from this area has been strong, with price now trading around $90.
My main focus is $94–97, where I see an important gap zone combined with buy-side liquidity above the recent highs. I want to see how price reacts there before taking a stronger directional view.
The latest COT data supports the bullish structure. Non-commercial traders hold approximately 323K long contracts versus 200K shorts, leaving speculative positioning net long by roughly 123K contracts. Positioning is therefore constructive, but not at a level that makes me consider the market excessively crowded.
Seasonality is where I become more cautious. September is mixed depending on the historical window, while the longer-term data becomes noticeably weaker moving into Q4, particularly in October and November. I don't use seasonality as an entry trigger, but in this case it adds an interesting element to the technical picture.
Fundamentals are also currently supportive. US crude inventories recently recorded a larger-than-expected draw, while geopolitical tensions continue to maintain a significant risk premium in oil prices. This is also why I would not automatically short $94–97 simply because it is a gap zone. I need confirmation from price.
My preferred scenario would be a move into $94–97, a sweep of the liquidity above the highs and then clear bearish displacement. In that case, I would look toward the $78–80 sell-side liquidity, with $72–74 remaining my main HTF demand area.
A correction into $72–74 would not invalidate my bullish macro view. If buyers defend that area, I would consider it a potential base for another expansion toward $104–106 and eventually $118–120.
On the other hand, if WTI establishes clear acceptance above $97, I would abandon the deeper retracement thesis and focus directly on $104–106, followed by the liquidity around $118–120.
From a technical perspective, my overall bias remains bullish. After breaking out of the major descending structure, WTI found strong demand around $68–74, where the weekly gap, ascending trendline and HTF demand converged. The reaction from this area has been strong, with price now trading around $90.
My main focus is $94–97, where I see an important gap zone combined with buy-side liquidity above the recent highs. I want to see how price reacts there before taking a stronger directional view.
The latest COT data supports the bullish structure. Non-commercial traders hold approximately 323K long contracts versus 200K shorts, leaving speculative positioning net long by roughly 123K contracts. Positioning is therefore constructive, but not at a level that makes me consider the market excessively crowded.
Seasonality is where I become more cautious. September is mixed depending on the historical window, while the longer-term data becomes noticeably weaker moving into Q4, particularly in October and November. I don't use seasonality as an entry trigger, but in this case it adds an interesting element to the technical picture.
Fundamentals are also currently supportive. US crude inventories recently recorded a larger-than-expected draw, while geopolitical tensions continue to maintain a significant risk premium in oil prices. This is also why I would not automatically short $94–97 simply because it is a gap zone. I need confirmation from price.
My preferred scenario would be a move into $94–97, a sweep of the liquidity above the highs and then clear bearish displacement. In that case, I would look toward the $78–80 sell-side liquidity, with $72–74 remaining my main HTF demand area.
A correction into $72–74 would not invalidate my bullish macro view. If buyers defend that area, I would consider it a potential base for another expansion toward $104–106 and eventually $118–120.
On the other hand, if WTI establishes clear acceptance above $97, I would abandon the deeper retracement thesis and focus directly on $104–106, followed by the liquidity around $118–120.
Nicola Capiotto | EdgeTradingJourney
I document my trading around work and triathlon.
I document my trading around work and triathlon.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Nicola Capiotto | EdgeTradingJourney
I document my trading around work and triathlon.
I document my trading around work and triathlon.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.