UPDATE ON CRUDE OIL (11:30 pm EST)
We are well into the current medium-term cycle in crude oil. In fact, the final bottom to this cycle is now due, and it may have already happened with Tuesday's low at $54.98 (Jan. contract chart). That low was in the center of a general reversal zone (Dec. 11- 22) as well as one specifically for crude (Dec. 9 - 18). There is still time, however, for prices to push lower tomorrow or next Monday, or perhaps form a double bottom to Tuesday's low. It may be a good time to go long in crude, as the start of a new cycle is typically bullish; however, we need to consider a few other factors at this time.
The current medium-term cycle started with a low on Aug.13 at $60.46. This cycle has clearly been bearish as it has been trending down from that starting point. Tuesday's price even went lower than the October low of $56. Some longer-term cycles in crude also seem to be pointing down right now. This suggests that any new medium-term cycle rally could be minor or short-lived before the downward trend resumes. A move above $70 might change this bearish view, but until that happens, I think I will stay on the sidelines of crude and perhaps consider short-selling any rallies into resistance levels or reversal zones.
We are well into the current medium-term cycle in crude oil. In fact, the final bottom to this cycle is now due, and it may have already happened with Tuesday's low at $54.98 (Jan. contract chart). That low was in the center of a general reversal zone (Dec. 11- 22) as well as one specifically for crude (Dec. 9 - 18). There is still time, however, for prices to push lower tomorrow or next Monday, or perhaps form a double bottom to Tuesday's low. It may be a good time to go long in crude, as the start of a new cycle is typically bullish; however, we need to consider a few other factors at this time.
The current medium-term cycle started with a low on Aug.13 at $60.46. This cycle has clearly been bearish as it has been trending down from that starting point. Tuesday's price even went lower than the October low of $56. Some longer-term cycles in crude also seem to be pointing down right now. This suggests that any new medium-term cycle rally could be minor or short-lived before the downward trend resumes. A move above $70 might change this bearish view, but until that happens, I think I will stay on the sidelines of crude and perhaps consider short-selling any rallies into resistance levels or reversal zones.
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