Crude oil going for 20

FX:USOIL   CFDs on Crude Oil (WTI)
858 17 11
I'm still bearish when it comes to the bigger picture for crude oil             , there are just too many guidelines invalidated to count the current bullish move as an impulse. I also see fundamental reasons why crude oil             is only consolidating after a strong bearish move. The guideline of alternation between corrections within a structure is working out perfect.

To be clear nothing is certain when it comes to trading but my bias is bearish . If that changes I will adjust but to count the bullish move from 26 we need an acceleration. Until that moment it has to be corrective although the move is strong.

Once the market is convinced a certain instrument is going in one direction it becomes very interesting for me to start looking for opportunities. Often in the other direction.

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Comment: The test of 50 and reversal was my sign to short, this was a relatively aggressive short. However if we see a first impulse lower (which we might have seen already on lower time frames), I will be looking to add short again.

updates will follow
Comment: 'jbourgault' commented about the possible AB=CD pattern for Oil and I think he has a fair point. That will mean that price might extend higher once again. This and '50' will provide a possible strong reversal once we see price failing to break higher. Structure is clear and overextended. My first trade got stopped out at break even and I will be looking for either a bearish break or a slightly higher high and THEN sell. However short term the reversal seems imminent.
Comment: The short got stopped out at break even and price is extending once again as mentioned last time where I mentioned that price was not out of the danger zone yet. Let's see whether price will be able to take out 50 and in case it does 51 should hold for support for the ideal reversal.
Updates will follow.
Very interesting development today on the USOIL­! Another major resistance level (51 level) was hit. And we have a major divergence between technicals and fundamentals --> the fundamentals were very good today (inventory is down by a lot). However, the price is not going up anymore (meaning that the current bullish move might be finally exhauted). I expect profit taking to take place in the next following days.

I'm already short with full position size around 51.10 with a stop loss around 51.60. Stop will be move at breakeven at the end of week if a top is taking place. 1st target is around 44$. 2nd target is at 40$.

Same conclusion here. I'm back with half-position size. I updated the last half position stop loss slighlty above 50 (above the current top). If it gets hits, I'll monitor the 51 level as you suggested.
Good stuff. I'm already short with half of my full position target size. I'll open the other half if it break below the current consolidation. Or around 51 if it breaks higher (which is the 100% extention of the first rebound wave, but also last October high). Current scenario will be invalidated if price goes clearly over 51$.
+1 Reply
jbourgault jbourgault
Breakout happened a couple hours ago. Second trade is active (first trade stop was moved at breakeven).

@Tim : what would be your suggested targets?
TimStuyts jbourgault
I shorted at 50 as well, looking for 40 as first target, longer term still 20. But I will closely watch lower time frames for structure. We are still not out the danger zone for that last potential extension higher but the bearish momentum is taking over as expected.
Is this idea still relevant?

Personnaly, I'll keep monitoring the 100% extension of the previous wave.
TimStuyts jbourgault
Yes it might extend a little higher, 50 is a strong level but have to see how this consolidation of lesser degree unfolds. Will update later today. The extension looks good by the way, especially since I still consider this a corrective pattern with a 3 wave structure. Thanks for sharing.
TimStuyts sodoba29
Like I said, nothing is certain so I alway's keep an open bias. But key is that I expect a reversal soon (short term and then I will reevaluate). In terms of patterns (which I don't trade because I need a higher probability in my trading and no pattern can provide that). Even a Head and shoulder pattern will not invalidate my bigger picture outlook with oil towards 20. I counted the leg up as corrective. However we might see a correction of larger degree (the orange ABC count can be a wave A of larger degree). Wave 4 of lesser degree is above 60 and we might very well test that. It is all about context and structure. So let's see what's next. As described, I need to see an acceleration higher before I will change my overall view, and by that I mean a stronger acceleration than we saw from previous lows.
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