Talk about rejection! Oil destined for $42.00

FX:USOIL   CFDs on Crude Oil (WTI)
Talk about rejection! Today we saw some crazy dollar strength. As of 3pm, the dollar had made a 100% retracement or 214 bps             round-trip from this morning's ECI drop. The market gave a clear signal that it believes - or rather, more likely, wants, a Fed rate hike. That's all that matters, folks. Oil             is heading lower.

What's more, the technicals strongly support the move. This week we saw a two day counter-trend rally move oil             up 6%. With today's price action, we have a firm rejection of the counter-trend rally, which means the downtrend is still intact and the move lower can proceed. Today, we also saw the futures break below the lows set prior to the counter-trend rally, a level that also corresponded with the 76.4% fib retracement of March's rally to 2015 highs.

100% is the next fib retracement level at 42.00, which falls within range of a fib extension zone b/w 41.55 and 43.25. The pace of the current downtrend from late June predicts 42.00 within 13 days.

Keeping in mind the absolute and relative low levels of oil             volatility (versus other asset classes) could cause that move to come much faster. A long vol, bearish options strategy might be a useful way to play the move. Next week I plan to take some profits in my 45 puts and roll into shorting the futures directly.

Also, keep the Mexican Peso on your watch list. My macro thoughts are OIL             --> CAD --> MXN.
EN English
EN English (UK)
EN English (IN)
DE Deutsch
FR Français
ES Español
IT Italiano
PL Polski
SV Svenska
TR Türkçe
RU Русский
PT Português
ID Bahasa Indonesia
MS Bahasa Melayu
TH ภาษาไทย
VI Tiếng Việt
JA 日本語
KO 한국어
ZH 简体中文
ZH 繁體中文
AR العربية
Home Stock Screener Forex Signal Finder Cryptocurrency Signal Finder Economic Calendar How It Works Chart Features House Rules Moderators Website & Broker Solutions Widgets Stock Charting Library Feature Request Blog & News FAQ Help & Wiki Twitter
Profile Profile Settings Account and Billing My Support Tickets Contact Support Ideas Published Followers Following Private Messages Chat Sign Out