chartwatchers

OIL - Bounce is off the table

FX:USOIL   Crude Oil (WTI)
3405 47 71
6 months ago
During the last 2 weeks oil             was consolidating. As today we broke 44.40$ the bounce above 50$ is off the table for 2 weeks.
First we need to print the daily cycle low in 2 weeks. When oil             bottoms and start to rally again oil             related stocks will rally.
It will also give a big push to the general stock market as well.

We just have to wait for oil             to bottom. I will be buying between 38-42$.
It seems strong not a big decline. We might bottom at 42$. Time will tell.

I'm not shorting oil             . If something the World's powers don't want - especially USA-Govt before elections -- : an oil             related recession because of falling oil             prices.
So oil             at 40$ is a buy.
6 months ago
Comment: I still can read at many forums that traders are waiting for oil to fall below 30$.
This is the thing just not going to happen. We are in the phase of intermediate correction in oil.
Look at that correction! This is a very weak decline. The reason for that is the oil related shares.
With S&P at new highs , Nasdaq near to new highs oil shares simply cannot fall.
If oil shares are not falling oil will not print a serious decline even at the intermediate correction.
So if you are shorting oil in the next 2-3 weeks be ready for 3-4$ pop when market realizes that oil shares are breaking out of consolidation and oil had no business below 50$.
I will be launching the Energy trade 4 - the portfolio is in in +140% - in 2-3 weeks and this is going to be a long trade. So those who were making big money with me in oil from February till May don't get stucked in a looser short trade when we are starting to long it. This run is going to be better then the Feb-May one.
6 months ago
Comment: IXE before the breakout if that breaks out oil bears will be toasted.
snapshot
6 months ago
Comment: It's forming an ascending triangle.
5 months ago
Comment: 3rd day of falling. Oil hasn't fallen for 3 days since the middle of June.
KhunHunSein
6 months ago
thz C W
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harilaos
6 months ago
reasonable, but don't take very seriously the politicians, their needs and wishful thinking
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Trendhopper
6 months ago
Rig data out in 40 mins, so we might have a nice jump very shortly and blast back over the 44.40 resistance...up to around 45.40- 45.60....this would be an excellent place to short..for the coming 2 weeks as I agree with your analysis that it will fall further, in my view 41.80 - 42.00 will be the bottom, this is based on EW theory and Fib levels, so far oil rally from winter has followed a lot of Fib/EW so no reason this won't continue going forwards.....
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epalazzo
6 months ago
Seems stocks breather is going to happen at and around the DCL of oil, gold.
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epalazzo epalazzo
6 months ago
stocks=stocks'
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I hated this whipsaw since the very first moment and really hoped it won´t go that far.... But we´ve made 7 figures in 2 months and looks like you are right: we will still have to stand some last scratching accords...

snapshot
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captain_smollett PRO captain_smollett
6 months ago
I also heard of people that expect 35 USD per barrel on WTI. Cannot reproduce this on my charts though I don´t have any model for this....
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chu168
6 months ago
agree your option
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verlin03
6 months ago
central banks dont control oil prices silly. what are financial people going do? you know... ceos... mba types. what are they going to do this fall when rbob stocks are at historic highs? earnings calls next week should let us know of any early refinery cutbacks. so far though... utilization is pretty normal. any signs of refiner capitulation and we could see sub $40 oil pretty quickly. the question is.... when does the market realize this? you sir are answering the question :) its $40. Take a look at when equities started to sell off with oil back at the beginning of the year. Take a look at the price of gold during the following months :) im not certain this is going to repeat. i cant see that far out. it would be silly though to start buying at that level without seeing some sort of price reaction in rbob. we needed sub $1.10 RBOB to get a demand response. there is also way more downside risk on the horizon. how full is china's spr. eventually they will stop. They are getting close. Production in the us is just not falling fast enough. you are not going to get a full recovery in oil until producers participate and buy back their hedges. right now producers are selling this summer bounce harder than ever.
+1 Reply
nahidik PRO
6 months ago
We are still producing more than we are using. As you mentioned oil is as manipulated as much or more than most commodities. I published this possible scenario a couple months back. Probably won't happen but you never know...
Oil may not be out of the woods yet?
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verlin03
6 months ago
when refiners capitulate CL and RBOB will converge (CL down RBOB Up). When RBOB spikes up, you buy. That could be several weeks to months. Picking a level out of thin air thats not supported by fundamentals is foolish. its similar to shorting gold this far into the daily cycle. going long in oil this far into the demand cycle is just a foolish. you'll get it. i can tell you still haven't followed my advice on doing an RBOB and CL analysis. you will either do it now or when oil falls below $40 :) RBOB is the tail that wags the dog. Easy money ;)
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Nightstar
6 months ago
My work lines up with yours Arpi..OIL retraced all the way back to the 38% Fib back in April 2016 and will do so again at the very least. It might even break 42 and tag the 200DMA just to scare the shit out of the Bulls!

snapshot
+3 Reply
traderzaius
6 months ago
I expect oil to bounce once the HCL for stocks complete. It should be a massive bounce.
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traderzaius traderzaius
6 months ago
thought I can see a scenario where the bottom is closer than anyone expects due to the fed rescuing :D
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Annette
6 months ago
I have followed other tools considering also geopolitical issue all over suppliers, explaining the reason why at the end I have the same result ;)

SHORT than LONG
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verlin03
6 months ago
I've thought more about your last comment and premise behind your trade. It really explains why stocks are at all time highs. You perceive no risk. It's the very definition of a bubble. I'm here to tell you that if you think central banks will buy gasoline futures to artificially create inflation that your nuts. Thats what they would have to do to keep refineries going and incentivize the storage of gasoline. Buying oil futures instead of gasoline futures would worsen the problem (refiner margin). But let's give you the benefit of the doubt, say the fed does save the day and jumps in and buys oil up to $60. It could make crude more expensive than gasoline on a per gallon basis giving refineries zero incentive to physically buy crude.
+2 Reply
Duke_QXY
6 months ago
I do believe it will be back to 50$!
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caneman Duke_QXY
6 months ago
its quite possible the daily cycle low was printed yesterday...
+1 Reply
chartwatchers PRO caneman
6 months ago
Too late for the 2nd daily cycle low and too early for the 3rd daily cycle low. And I dont see the reversal candlestick by the close.
Also the indicators are not showing the cycle low. MACD printed a kiss and goodbye. RSI is not oversold.
More decline is coming.

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alelass
6 months ago
Long Brent @ 45.72/44.54 tgt 48.30/50.50 (CBV2016)
trying longs already, assuming DCL is in on 22nd July. expecting 3-5$ upmove
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chartwatchers PRO alelass
6 months ago
It will not bounce now. We will drop minimum 2 dollars from here. And this is the Intermediate low not a simple daily cycle low.
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godaccess alelass
5 months ago
You're a novice.
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andrej123456
6 months ago
I wouldnt wonder very much if we are heading back to 30-35. There is some price correlation with soybean oil. http://www.cmegroup.com/education/featured-reports/veg-oil-vs-crude-oil.html
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verlin03
6 months ago
Im expecting a bounce off $42 within a week or two. If crack spreads plummet on the bounce it will be heavily sold just like it has for the prior two weeks. You Bulls are serving an important purpose of annihilating refiner demand. The market is currently weeding out marginal refiners.
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verlin03
6 months ago
In my opinion we a forming a declining wedge that will likely break to the downside if refiners capitulate and to the upside if there is a RBOB demand response. This pattern will likely last for weeks but could pop at any time to the downside. A demand response will take weeks to materialize
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Excellent analysis sir! Though I am of slightly different mind. Although prices made a decisive break below 44.4 support, there were a few other demand levels set in may right below. As well, I am seeing bullish RSI divergence. I believe this breakdown will in fact be a spring. Good trading to you!
Oil Bullish Spring?
+1 Reply
verlin03 smitheric1970
6 months ago
Do the same analysis for RBOB and tell me what you see :)
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smitheric1970 PRO verlin03
6 months ago
Similar, I've never charted it before so started with the weekly. Prices may break down further, but just like oil, are currently still in a demand zone and I expect upside first. I am extremely bearish oil mid-long term; further down in 2017 but first expect further upside.
RBOB Long and Short of it
+1 Reply
chartwatchers PRO smitheric1970
6 months ago
That's a breakaway gap guys. Will never get filled.
Maybe in 2040-50-60 when we drive only electric cars....
+1 Reply
verlin03 chartwatchers
6 months ago
you are a funny guy. the gap was created on a rollover. perhaps you should see what rbob is trading for in october? if you analyze the fundamentals.... it took sub 1.10 RBOB to get a demand response. it shows in the chart
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verlin03 chartwatchers
6 months ago
What I'm telling you is worth gold! That march gapup in RBOB was the ultimate CL buy signal. Until the wedge broke down on RBOB weakness.... What do you think is going to happen to CL after you realize where RBV6 is trading? :) you welcome.
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smitheric1970 PRO verlin03
6 months ago
Thank you?
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smitheric1970 PRO chartwatchers
6 months ago
possible, I've never traded rbob.... your analysis is fantastic by the way sir!
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investment6300 chartwatchers
5 months ago
Apri I like your sense of humour, you make me laugh as much as a I try and learn from you....Hahahaha
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tbuckle PRO
6 months ago
But you think oil could drop from here at $44 to $40-42 area correct?
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chartwatchers PRO tbuckle
6 months ago
42$ for sure we will get. 40$ is a question though.
+2 Reply
ArtFly chartwatchers
5 months ago
I assume that we can get oil below $ 40
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ja.piotr.bor
5 months ago
Today drop was heavy, but we are getting to have DCL or ICL next week I think...
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stenozar
5 months ago
Hi, what do you think, is it time to buy or not yet?
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ja.piotr.bor
5 months ago
We are close to the ICL, I think, yestersterday printed 42.3, 42$ close, so this day or yesterday was the best to entry I think.
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Which 3x etf is best to trade oil stocks?
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ice_holly01 pbartashevich
5 months ago
UWTI/DWTI?
+1 Reply
pbartashevich PRO ice_holly01
5 months ago
Thanks. I think UWTI is pure oil. Will that be the best instrument for this trade? I found ERX for energy stocks but looking for guidance. I cannot trade futures on my banking account so have to stick with ETFs or stocks.
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bertcoin PRO pbartashevich
5 months ago
I'm going UWTI for the coming rally. I don't do Forex or futures either (yet) so UWTI/DWTI for USOIL (WTI) and UGAZ/DGAZ for NGAS (Henry Hub) for Chartwatcher's Nat Gas posts. They are all exchange traded NOTES (ETN's) so have some risks that ETF's don't. Some IRA managed brokers don't like ETN's as well, but the e-Trade, TDAmeritrade, ScottTrade, etc all trade them (including extended hours).
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ja.piotr.bor
5 months ago
Nice drop, what caused this ? EIA/API report?
investing page crash haha.
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pbartashevich PRO ja.piotr.bor
5 months ago
Pre-FOMC oh shit they going to hike moment :) Everything is arranged for that.
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ja.piotr.bor pbartashevich
5 months ago
But DX index isn't like high (it was pricing rate hike ?), and gold have gone higher today.
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