CRUDE OIL UPDATE (2:30 pm EDST)
Crude oil prices have finally broken out of their $70 - $83 (April contract chart) "congestion" range with a bearish plunge down to $65.65. The current medium-term cycle in crude most likely began with the Dec. 9, 2022 low of $70.86. If that's the case, the cycle's trend has now turned bearish (it has broken below its starting point). That means prices will continue lower until the final cycle bottom is attained. This medium-term cycle is mature, and its final bottom is most likely due in mid-April in the $60 - $65 range (possibly lower).
The bottom of the current medium-term cycle will also most likely correspond to the bottom of a longer-term 3-year cycle in crude (and start of a new one), which means it should be an excellent buy spot as the early stage of any cycle is bullish. I should also note here that the great "sell-off'" in crude that happened back in April 2020 (when prices actually dropped BELOW zero) resulted in a long-term low that marked the start of a new 18-year and 9-year cycle in crude. That means we are only three years into both of these cycles, so they are relatively young and bullish. What this means is that crude prices have the potential to move a lot higher over the next several years.
For now, we will keep an eye out for the final bottom of the current medium-term cycle. Prices are dropping sharply into the center of our current strong reversal zone, so some sort of significant bottom could form here. It's a bit early for the final bottom (which we would like to see in the $60- $65 range and closer to mid-April), but sometimes cycles contract, especially if they are aligning with a longer-term cycle (in this case, a 3-year cycle), so it wouldn't be impossible to see a final medium-term cycle bottom form now. We will keep in mind this possibility even as we expect a final bottom to be more likely in April. We are on the sidelines of crude oil for now.
Crude oil prices have finally broken out of their $70 - $83 (April contract chart) "congestion" range with a bearish plunge down to $65.65. The current medium-term cycle in crude most likely began with the Dec. 9, 2022 low of $70.86. If that's the case, the cycle's trend has now turned bearish (it has broken below its starting point). That means prices will continue lower until the final cycle bottom is attained. This medium-term cycle is mature, and its final bottom is most likely due in mid-April in the $60 - $65 range (possibly lower).
The bottom of the current medium-term cycle will also most likely correspond to the bottom of a longer-term 3-year cycle in crude (and start of a new one), which means it should be an excellent buy spot as the early stage of any cycle is bullish. I should also note here that the great "sell-off'" in crude that happened back in April 2020 (when prices actually dropped BELOW zero) resulted in a long-term low that marked the start of a new 18-year and 9-year cycle in crude. That means we are only three years into both of these cycles, so they are relatively young and bullish. What this means is that crude prices have the potential to move a lot higher over the next several years.
For now, we will keep an eye out for the final bottom of the current medium-term cycle. Prices are dropping sharply into the center of our current strong reversal zone, so some sort of significant bottom could form here. It's a bit early for the final bottom (which we would like to see in the $60- $65 range and closer to mid-April), but sometimes cycles contract, especially if they are aligning with a longer-term cycle (in this case, a 3-year cycle), so it wouldn't be impossible to see a final medium-term cycle bottom form now. We will keep in mind this possibility even as we expect a final bottom to be more likely in April. We are on the sidelines of crude oil for now.
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