Time wise we should be close to the top of this intermediate cycle so I'm going to follow oil closely in a smaller time frame during the next month.
This is the time when I open my larger short position with a heavier margin impact.
We are still in the 3rd daily cycle in this intermediate cycle and we need to start our move down into the ICL.
We should not forget about the previous daily cycle low. It was a failed daily cycle : we broke below the previous DCL. As we made a higher high during the last few days I think if we start to roll over into the intermediate cycle low we will stop this decline above 39$.
This intermediate cycle was not such a big rally. We broke to new highs but traders were watching the news too closely. Will OPEC have or not have a deal?! If there is a deal will they cut or not..
Now they have the deal and everybody is waiting for the effect of the cut. So I think while we are waiting a few big players will start to get rid of their long positions.
So the OPEC deal was enough for a breakout but that's it.
Also stocks are seem to be topping. If stock market is topping and heading to the DCL or ICL oil will fall also.
I hope you remember : at the end of the intermediate decline we will have a panic selling. And we want to be short in that panic selling...
Indicators & divergencies
divergence (blue lines)
divergence (purple lines)
Notice the decreasing of the breakout.
The bottom could be between 42.5 and 39$. 42.5$ is a strong resistance I wonder if we can break below it or not.
-NEW SHORT ENTRY
-ADDING TO SHORT POSITIONS- up to 40-45% margin impact.
A key reversal is forming after the failed breakout.