Inventory tomorrow will tell it all. Either we are in the right shoulder of the inverted head and shoulder, or the Stoch RSI validates that we are topped out, and need the last leg down, to not sure where at this point. Could be a short journey and time frame,maybe 38 or 35, or could extend lower all the way to 26. But, I am really out on that limb here, saying inventory build, and we go lower, with many that bought this as the bottom getting caught long, having to hedge with shorts, or ride it out, lowering the volume of trade here, increasing that volatility and price downward. Many possibilities. And we are within the deviations of the last trip downward, so... we will see.
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Regardless of where we bottom out, I think this inverse HS is the last time we see these lows for a long time. Just too classic unless something stupid happens to the markets lower, unrelated to oil, and the dollar spikes higher, again unrelated to oil, and oil has no choice but to plummet. And something stupid happens a lot in August, sept, and october, very volatile months. Keep an eye on China. They have been asleep for too long now.
Comments
thomas.tombur
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I agree with the direction and would add to this that the last rip up represented a short squeeze resulting from O.P.E.C Jaw boning the market higher these last few days.
We all know there is nothing to any O.P.E.C commitments for a cut in production:
my trade is this:
sell short at $ 43.20 with a target to cover at $40.20. stop loss in at $ 44.60 witch would be a time to wash out and get long.
claydoctor
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I agree. That is safe play. Take part of that profit, and let it go to 38 and see if 35 is doable. If there is an inventory build, woops big time, and players will be worried about how low it will go. buyers will try to protect, but if the numbers are a big enough surpise, people will panic and sell.
samjp2
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Thomas, I am interested if you cut short position @ 44.60 as suggested and are now long, or have you seen something else and remain short? Thank you
thomas.tombur
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unfortunately; I did not follow my own rules. I assumed the strength was simply O.P.E.C jaw bonning the market higher therefore I canceled the stop at $44.40 witch was a mistake. Today with the sharp reversal in the U.S dollar below $95 vs the Yen, Pound Sterling and more importantly the EURO!!, It became somewhat obvious this is a dollar story. This in addition to the markets rather ho hum reaction to Fed Speak indicating a rate hike may be on the table tells me we may be in for a low buck environment a new Bull in commodities very similar to that we experienced in late Feb, 2016. E.U. additional Q.E. + buying corporate debt and extending the time period cracked the back of the dixi and the EURO experienced a sharp reversal. I covered all my short positions today. I am net long t $46.15 with long the same position at $46.10 to $46. 20 with a target of $47.40 and a stop at $45.20.
I am looking to increase my Gold position at $1348. 50 on a stop in to sell the run up to $1365 short term with the basic idea that $ U.S dollar weakness = Commodities up!!!
I agree with the direction and would add to this that the last rip up represented a short squeeze resulting from O.P.E.C Jaw boning the market higher these last few days.
We all know there is nothing to any O.P.E.C commitments for a cut in production:
my trade is this:
sell short at $ 43.20 with a target to cover at $40.20. stop loss in at $ 44.60 witch would be a time to wash out and get long.