CRUDE OIL TRADE ALERT (11:30 pm EST)
Crude oil's current medium-term cycle began with its $54.89 (March contract price) low on Dec. 16. It rose to its first sub-cycle peak ($62.20) on Jan. 14, and then dipped to a potential sub-cycle bottom three days later at $58.53. From there, price have been rising with support just above the 45-day moving average. Monday's low was near the center of our strong general reversal zone (that ends tomorrow). With geopolitical tensions high right now, this market could surge higher, and the current cycle pattern is supporting that idea.
We note that last week's peak tested a downward sloping trend-line near $62. If this market is going to be bullish, it needs to rally above that line (now around $61.70) soon and break above $62.20. There are several longer-term cycles in crude that are currently ambiguous - i.e. they could be bearish or bullish. But based on the current medium-term cycle, prices look bullish, at least short-term. Based on this, I am going to enter a long position in crude for tomorrow's market open. I am putting an initial stop loss for this trade on a close below $58.
Crude oil's current medium-term cycle began with its $54.89 (March contract price) low on Dec. 16. It rose to its first sub-cycle peak ($62.20) on Jan. 14, and then dipped to a potential sub-cycle bottom three days later at $58.53. From there, price have been rising with support just above the 45-day moving average. Monday's low was near the center of our strong general reversal zone (that ends tomorrow). With geopolitical tensions high right now, this market could surge higher, and the current cycle pattern is supporting that idea.
We note that last week's peak tested a downward sloping trend-line near $62. If this market is going to be bullish, it needs to rally above that line (now around $61.70) soon and break above $62.20. There are several longer-term cycles in crude that are currently ambiguous - i.e. they could be bearish or bullish. But based on the current medium-term cycle, prices look bullish, at least short-term. Based on this, I am going to enter a long position in crude for tomorrow's market open. I am putting an initial stop loss for this trade on a close below $58.
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