WTI/USOIL (The Beast) - Can we break? Or is it a retracement?So it is Very fair to say that the last 2 weekly candles have been very naughty indeed.
For any EMA traders that took heed of the very important contacts with the 800 in the daily and the 100 on the weekly-provided they didn't fiddle too much-should have added substantial gains to trading account.
Most of our traders in this team did at least 150% with the top winner Tripling their account.
Its also fair to say that if you are not already in a long it may be better to stay on the side lines and wait for a decent short or await a dip to enter at a key support level. We do however need to bear in mind that historically October is "mark up" month.
The last idea spoke of a news that would send price down to the levels we were looking at in Jan 2022. That news was US rates going up more than expected and the result was high demand for the Dollar and a sharp rise in the DXY sending us down to one of the levels mentioned in the previous idea. We spoke of a move to begin from when a bottom is established at a place where there is a strong reaction as well as some other confluences.
The are that it happened from was 76.25. The confluences were as follows:
- Being at a level that had been tested multiple times in the past as both resistance and support
- Making contact (or overriding the 800 and 100 EMAs of the Daily and Weekly time frames respectively
- The formation of an inverse head and shoulders pattern
- The recovery of Blue Vector candles at the base by a big Red Vector candle (making the head) followed by a new Blue Vector candle at the base (making the second shoulder)
- Failure in 4HR time frame to embed to the downside on the Stochastic RSI and it's subsequent emergence out of oversold
5 very good reasons to go long blindly and hold 90% of the position for 1350 pips. The other 10% still running to see just how cheeky the Beast will be in it's charge to the upside (96.2 next stop if remains Bullish). Currently, it is at almost 1700 pips from where it took off from. But we are very close to the 800 EMA in the 4 Hour time frame.(tends to be a good place to have a strong price reaction)
We also have to bear in mind that most of the crazy moves we have seen his year have had a "distance traveled" of 1000-1700 pips before either retracing or reversing.
So What now?
Although we said in the previous idea, after a few Shandy's that we were going back to the high and would potentially break it and make a new all time high, there is a chance that that will not happen very soon. If it does, great but being realistic, we must think of the lower levels that it may visit before any pump to those levels.
BULLISH VIEW
There are Red Vector candles that were made all the way down from $123 Some of these will surely be recovered by March 2023.All of the ones that happened from $90 down have been recovered last week. The main ones that we are now looking at are the ones on the way to $103 where there is a price gap to the downside.
However before getting there, there is a Juicy Purple Vector Candle at $97 with it's wick top being at $97.67. We will look for a nice short there, even if price is to continue up.
The journey up there should be a nice ride from whichever the next solid support will be -if this trend has indeed reversed to the upside.
We are currently looking at the following levels as ranges to enter fresh positions for a continuation to the upside:
77.28 (4 Hour Blue Vector candle recovery)
78.11 (4 Hour Green Vector candle recovery)
79.90 (4 Hour price gap)
83.30-84 (Key support/resistance area)
86.00-44 (4 Hour Green Vector candle recovery)
89.20 (4 Hour Green Vector recovery and retest of 2.5 Pitchfork line)
Targets are in the paragraph above
This is essentially a 1200 pip range so we must be very careful. All the while bearing in mind that there are still levels like 75,74,72,66 and of course 62 that price could go to with the right conditions as they are all supports and places that Green Vector candles exist.
BEARISH VIEW
When price is moving so strongly in one direction they tend to say "buy the dips in an up trend and sell the rallies in a down trend."
If this is a case of sell the rally then there should be a short very soon.Especially if the DXY wants to go on more of a run to the upside and or Supply increases/Demand falls in Oil.
Now some would say that there has been a break in structure to the upside in the downtrend that we have been in since March, and that we are off to 98-100. But have we really? In our opinion not until we've cleared 96.6-97 comfortably has there been such a thing.
Now if we fail here (97) or somewhere close, there is a good chance that we are going to either come down to retest the levels in the Bullish view to go long again or we are going to continue a down trend and go and test 75,74,72,66 and of course 62.
We are looking for entries for a continuation of a down trend (if that's what is to come) at the following levels:
93.75 (4 Hour 800 EMA)
95.3 (4 Hour Green Vector candle recovery)
96.2-97.7 (4 Hour Green Vector candle recovery)
99 (4 Hour Green Vector candle recovery)
102 (4 Hour Green Vector candle recovery)
103.5-103.7 (Price gap)
108 (4 Hour Green Vector candle recovery)
110 (4 Hour Red Vector candle recovery)
113 (4 Hour Red Vector candle recovery)
This is a 1000 pip range so once again we must be very careful.
Good Luck Traders!
This is not financial or trading advice and should be taken with a pinch of salt.
