CRUDE OIL TRADE ALERT (2:30 pm EDT)
Crude oil prices are dropping sharply today and will almost certainly be closing below our stop loss point of $75 given in yesterday's blog. I am therefore going to unload (sell) my long position in crude today. We are pulling out with a 6% loss, but there is now a danger of prices falling lower, so it is best to get out as we reassess our cycle analysis.
Two things could be happening here. It's possible the old medium-term cycle could be expanding beyond its normal range, and the final bottom could end up in our next general reversal zone - June 6 - 14. In that scenario, prices would have 3- 9 more trading days to fall lower. A second possibility would be even more bearish. If the isolated low on May 15 ($76.36 - July contract chart) was indeed the final bottom to a medium-term cycle, it would mean the cycle has already peaked (at $80.62 on May 29) because prices are now well below the start of the cycle and would be pointed down for at least several more months.
Right now, I think the first possibility is most likely. If that's the case, we may look to buy again at a lower price in the upcoming reversal zone, as long as prices stay above $64 (that was the low of May 2023 which was likely a long-term 4 year cycle low).
Crude oil prices are dropping sharply today and will almost certainly be closing below our stop loss point of $75 given in yesterday's blog. I am therefore going to unload (sell) my long position in crude today. We are pulling out with a 6% loss, but there is now a danger of prices falling lower, so it is best to get out as we reassess our cycle analysis.
Two things could be happening here. It's possible the old medium-term cycle could be expanding beyond its normal range, and the final bottom could end up in our next general reversal zone - June 6 - 14. In that scenario, prices would have 3- 9 more trading days to fall lower. A second possibility would be even more bearish. If the isolated low on May 15 ($76.36 - July contract chart) was indeed the final bottom to a medium-term cycle, it would mean the cycle has already peaked (at $80.62 on May 29) because prices are now well below the start of the cycle and would be pointed down for at least several more months.
Right now, I think the first possibility is most likely. If that's the case, we may look to buy again at a lower price in the upcoming reversal zone, as long as prices stay above $64 (that was the low of May 2023 which was likely a long-term 4 year cycle low).
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