After a rocket off the bottom and a nice trade, Crude needs a rest. Is the bottom in? We don't so...soon though. We feel crude could make another attempt at a bottom to shake out the weak longs. However, if crude wants more upside from here we will need to see some consolidation. Above the $47 and we could see an accelerated squeeze. Crude is on our daily watch list.
Looks like it will go sideways from here for now)
Killy_Mel Killy_Mel
It defintely needs some rest after that move.
+1 Reply
smitheric1970 PRO OffTheFloorTrader
Lol, it's been crazy! I believe we will begin to see distribution again at the 49.5 level; the 200 MA is right around the corner, I believe it will hold strong and downtrend resumption likely to ensue again. I am also strongly feeling that this oil jump is going to give the Feds one last chance to raise rates this month. This is and will continue to be a crazy month.
OffTheFloorTrader smitheric1970
Don't disagree with that. Crude is putting putting the hurt on the shorts and from the action this morning, it was painful. We are staying flat until we see some consolidation or a firm pullback. Would love to see the yearly lows taken out but with the current move it may be hard.
smitheric1970 PRO OffTheFloorTrader
There has been a strong range area in current and years past from 45.60 to 50.40 - We are now riding in that range; That range last broke down on July 30 this year at 49.36. I think we are looking at a 46-49.5'ish distribution area this week, hoping we'll see another bounce up to the high end of that soon. I would assume that oil will NOT maintain this current price structure going into the "potential" rate hike announcement which is two weeks away (Sept 17, please correct me if that is incorrect). Our current price looks to collide with the 200 MA in a couple of weeks. Should be interesting, I would expect to be back at our 43.50 big gigantic question mark inflection area in a couple weeks. (Late 2004 and 2009 are great references for current inflection models)

Good trading all!
OffTheFloorTrader smitheric1970
Great comments smitheric1970...those are nice levels. Since we shook out the remaining weak hands above 47.00 We think we rest a bit or even pullback. We have already sold off $2 from today's highs. The OPEC news has shorts nervous and they are heading for he hills which ran stops along the way. Now we have to determine if OPEC is crying foul or not. We like a pullback into the 42 area, which would be a gift. Stops will be tight just in case OPEC balks and the fed hikes rates. Should be fun. Trade well!
Killy, I really like your material! If we do break above and end up in the green territory on your chart, I think 56.51 is an itch that really wants to be scratched! I don't think we will see that this time around but if we head back uphill next year (I know, "next year" is a presumptuous statement, I'm a perm-bear Lol, I think 56.51 is a big magnet and will become an ultra strong pivot longer term.
+1 Reply
Killy_Mel smitheric1970
Thanks) yep I agree! for now it is more likely to go lateral within the lower part of the band (42.7-51.7) - but more upside possible afterwards. I think Iran resolution in this month could help brign some clarity in the oil marker)
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