I'm going to use this post many times during the following month. We are getting late in this larger intermediate cycle in oil. Due to my cycle count we are going to have a correction and an intermediate cycle low in the first 2 weeks of August. It will be a great bottom a perfect buying opportunity for the rest of the year. I know most of you would like to catch every move in oil so I'm trying to predict what we can wait in July. What is almost 100% sure that we are having a bottom (intermediate correction box on the picture) between 1st Aug to 15th Aug. This bottom will be between the 200 SMA and the Saudi beartrap bottom. The Saudi bottom is a very important low, I think that will be an ultimate low for the next decade so powers will fight to protect that with tooth and nails.
The 2 options for July is set by green and red trendlines. 1. (red) we will be in a range for the next 2 weeks not breaking the 51$ level and in the middle of July we start to head down into the intermediate correction box.(40% chance) 2. (green) We break the 51$ level next week , pop up to 55-60$ and we start to head down into the intermediate correction box in a steeper decline. (60% chance) The indicators , the lower consolidating volume are supporting this scenario. You know that I'm in the "S&P long camp " now . If stocks are breaking to new highs - and I think they will - the bull euphoria will pull up the oil prices to new highs as the oil related shares will rally as well..
So if you go long now you have to be prepared for an intermediate correction down to 37$ . If you go short be ready for a pop up to 55-60 during the next 2 weeks. If someone is risking only the 10-20% margin I think a short play will be profitable in 1.5 months from now just have some margin to survive the pop up to 55-60 if there will be. The young bull usually kicks the shorts one more time before finishes the first stage of the bull market.
My plan is to go short at the end of next week or the week after that at 51$ or higher when we will be quite late in the cycle
Comment
⋅
Anyway the weekly chart supports the 2nd scenario ( brekout to 55-60) It looks like a perfect bull flag.
Comment
⋅
The only thing doesn't support the breakout idea is the volume. It was low this week...
Comments
webmiztriz
⋅
excellent analysis... thank u ;)
faylee
⋅
once it can fall to $37, I think $27 is possible.
ma.sanjuy
⋅
Arpil.... just was refreshing your old post. I can see how accurate yr predictions are :)... I think you may consider using the above chart.... for further updation. Rgds/
haug01
⋅
USOIL is testing it's support at $46 for the third time since June (falling wedge as noted above). If it breaks below $46, should we go short? What is the next support? I am mildly short PBR now.
chartwatchers
⋅
I would wait what's happening in the US markets today.
I'm still long in usoil since yesterday
jackcrudeoil
⋅
Hi chart..what do you think about oil??what happen today? It's time to go short??thanks for your reply
TomasAdam
⋅
Hello, going to the 40?
andrej123456
⋅
Good chart as always, but my opinion is: I think we cant go back to 37 without much more stronger dollar or supply glut (last eia was much bigger drawdown then expected). At 50 and 51 is very strong resistance , it looks like investors are shorting it from there so it cant rally yet. In my view it doesnt have to go up ur down it can just in 45-51 for some time. that could be the reason of the low volume.
PowerOfCapital
⋅
Based on last Friday's price action, i am bias on your green one, too. If we take a look at UK oil, the price broken down trend line. We should see a wave 5 coming soon.