Big picture - time for oil to soar again?
Updated
Let's step back and look at the macro oil picture for a minute. Where is oil heading in the next 3 months and why?
YES - oil has had a great run up from $46 while the USD was dropping and stocks soaring.
YES - a minor drop is underway right now
YES - there's debate about the US shale impact and whether OPEC & non-OPEC producers like Russia can cooperate to raise prices further
BUT
1-the stock market consensus seems to be that's it's about to go into an extreme vertical bull market. This will drive price inflation and supports higher oil prices
2-there is no pressure on the USD to strengthen, but there is political pressure to weaken the USD to attract manufacturing.
3-oil is heading into a cluttered support zone at the $59-$61 range.
4-$61.50 is a 23.6% retracement (fits a light reversal in bull market), $58.50 is a 38.2% retracement (a decent wave 2 correction) in a strong uptrend.
4-it looks like the heating season will be longer than normal.
All of this drives me to say that oil is about to blast through the $66.50 ceiling and go back into uncharted territory. Looking at the multi-year picture below, I believe we have just been forming a solid base and the upward trend is just building. Certainly looks like wave 1 underway with a possible nominal wave 2 leading into a strong wave 3.
So- targeting new long entry at $58.50 to $61.50 range once I see a bullish pin bar signal or a solid base form on the daily charts. I am expecting the pin bar with a violent V shaped bottom and quick reversal back up. There have been a few bullish spikes that look a lot like producers shoving prices back up st key points. Time will tell of course....
YES - oil has had a great run up from $46 while the USD was dropping and stocks soaring.
YES - a minor drop is underway right now
YES - there's debate about the US shale impact and whether OPEC & non-OPEC producers like Russia can cooperate to raise prices further
BUT
1-the stock market consensus seems to be that's it's about to go into an extreme vertical bull market. This will drive price inflation and supports higher oil prices
2-there is no pressure on the USD to strengthen, but there is political pressure to weaken the USD to attract manufacturing.
3-oil is heading into a cluttered support zone at the $59-$61 range.
4-$61.50 is a 23.6% retracement (fits a light reversal in bull market), $58.50 is a 38.2% retracement (a decent wave 2 correction) in a strong uptrend.
4-it looks like the heating season will be longer than normal.
All of this drives me to say that oil is about to blast through the $66.50 ceiling and go back into uncharted territory. Looking at the multi-year picture below, I believe we have just been forming a solid base and the upward trend is just building. Certainly looks like wave 1 underway with a possible nominal wave 2 leading into a strong wave 3.
So- targeting new long entry at $58.50 to $61.50 range once I see a bullish pin bar signal or a solid base form on the daily charts. I am expecting the pin bar with a violent V shaped bottom and quick reversal back up. There have been a few bullish spikes that look a lot like producers shoving prices back up st key points. Time will tell of course....
Note
Getting closer to target range...Note
Looking for aggressive bottom action or pin bar to setup long entryNote
No bottom signs yet, well into my target long zone, waiting for price confirmation. The 4 hour chart shows the the drop is decelerating, but no bottom yet.Note
Well into my long entry zone and a bullish pin bar but price action does not support a bottom here. If prices fail below $58 then there won't be a bottom until close to $54. Looking at price action early next week but no entry at this point.
Note
Reversal inside my target box...but I think think this is a correction fakie (bull trap) due to an oversold condition and we are heading into the lower support level of $55. Set lower entry level at $55-$57Note
Missedtge $59 entry but it looks like we are going to get another crack at a good entry on this reversal. Daily showing topping action which supports a drop back under $59 with the original downtrend still intact.Even more apparent on the 4 hour chart. Looking for price to break $61.01 then challenge $59 quickly thereafter and possibly head towards $54. However, my money is on $59 holding firm and prices reversing up again to challenge new highs. Looking for a long entry likely near $58.50 to $59.50 on good bottoming price action.
Note
Nice head & shoulders on the 4hr chart for a drop to my long entry range. Not trading the drop as the R/R is abysmal and there have been strong pops back up
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