HelloTraders,
Light Crude Oil (Futures, Continuation contract in front) is next to check today.
Futures has made a high @ $66.60 at the week of April, 22. After that weakness went into Oil and brought price to $60.04. This is may a first fracture of an „i“-“ii“ which is not completely corrected. Means, a final move up to the lower line of a trendchannel, drawn in „grey“ is next to occur, may within a „double-flat“ correction. It could be, at this point, a so called „kiss goodby“ for price, and after, a multi week to month declinie will set the stage.
The alternate interpretation is, that at the first wave ((c)) high ($62.95) wave (ii) was done and the decline within wave (iii) has started. But the move that followed after that high, looks to my view not impulsivly down. So it is a possibilitie with lower likelyhood.
What more important and caught my eye, is the „CoT-Report“, which is published every Friday after closing bell, and report the size of Future and /or Option contracts held by three categorys of Traders. (A part of this report is shown below at the graph below the chart of 360 min.)
These are the Commercials, the Large and the „Non reportable“ traders. The latter one so called, because there position size is relativly to small to those held by both named first.
To check that position size, we have to switch to the weekly chart.
At the high @ $76.90 for a barrell the position net size of Large Specs (blue line) was @ 582.175K contracts net long, and those by Commercials (red line) were @ -616.484K contracts net short.
In other words, the Large Specs have been net long, while the Commercials, always holding the opposite of the position, were net short!
During the following decline in a possible wave „1“ of Minor degree, Large specs reduce their position size to 376.415 net long contracts. The commercials decreased their position size to -409.097K net short contracts.
As wave „2“ set the stage and develope, Large Specs increase again their net long position to 552.888K contracts, Commercials decrease their to -565.69K! The position size by Large Specs were close to a record size, while price hit the extreme in wave „2“!
Since than, price reversed and Large Specs reduce their position size.
When wave „3“ will start (or has done) the Large Specs will often reverse their position size, most time at highs or lows. If this count is correct and will work out well, we will see price levels during the following decline well below the wae „1“ level of $42.36!
Have a great week....
ruebennase
Feel free to ask or comment.
Trading this analyze is at your own risk!