You would be forgiven to think that OIL has started a new bull run just because it has broken the daily top. Indeed several ideas posted today are calling for $70 or so to long the oil. Don't get me wrong, I am an Oil bull in the medium to long run but I am not convinced that it is ready to move up just yet. The previous major correction lasted for 10 months. The current correction has barely begun a few weeks ago. As such, it not moving up just yet. In fact, I am of the view that OIL is likely to be in correction for the remainder of this year.
Having said that, I have labelled my chart for what I believe is happening. I believe that Wave B can sometimes make a new high, thus creating a Bull Trap! and this is exactly what I think it is.
Let's review the 'reasons' we are told OIL has rallied up to a new high.
1. US vs Russia tensions?
2. Trade wars easing (conciliatory tone from China)?
Also, on the other hand
1. The OIL inventories are increasing
2. The OIL production in US and Canada is rising
You are likely to be a bull if you believe that the former is a perfect explanation of what has happened with Oil today. However, I don't buy it. I believe that market is simply pricing out the weak hands, before the next major move down.
The conditions are simply not there for a sustained rally towards $70 just yet.
This is simply my opinion. You have a right to your own opinion.
I am holding my shorts for now.
Happy Trading!
Having said that, I have labelled my chart for what I believe is happening. I believe that Wave B can sometimes make a new high, thus creating a Bull Trap! and this is exactly what I think it is.
Let's review the 'reasons' we are told OIL has rallied up to a new high.
1. US vs Russia tensions?
2. Trade wars easing (conciliatory tone from China)?
Also, on the other hand
1. The OIL inventories are increasing
2. The OIL production in US and Canada is rising
You are likely to be a bull if you believe that the former is a perfect explanation of what has happened with Oil today. However, I don't buy it. I believe that market is simply pricing out the weak hands, before the next major move down.
The conditions are simply not there for a sustained rally towards $70 just yet.
This is simply my opinion. You have a right to your own opinion.
I am holding my shorts for now.
Happy Trading!
Comment:
It has taken slightly longer than I thought, but here it is.
