The medium-term cycle labeling in crude oil is still not clear. That deep $63.57 (June contract chart) low on May 4 could be the start of a new medium-term cycle as well as a new longer-term 3-year cycle in crude. If correct, crude would be quite bullish now and ready to rise to new heights shortly. This is my preferred scenario at the moment. However, we still can't rule out the possibility that a new medium-term cycle started with the $64.58 low on March 20. In that case, the May 4th low ($63.57) could be considered the first sub-cycle bottom, and because it is lower than the start of the cycle, it would mean the cycle has turned bearish and is headed lower for many more weeks.
Crude prices rallied strongly today and are closing above the 15-day moving average. That's supporting the case for a bullish new medium-term cycle starting on May 4. A break above last week's high ($73.89) and the 45-day moving average (currently around $74.70 and rising slowly) would support the bullish scenario even more. We are now in a reversal zone specifically for crude (May 16 - 25) that is overlapping with our strong general reversal zone (May 11 - 19). Prices made an isolated low on Monday ($69.41) within the general reversal zone but just out of the crude reversal zone, and they are now rising sharply. Any new highs this week or next would be in crude's reversal time frame, and that could send prices back down. If prices can drop back down a bit below $69.41 (and stay above $63.57) this week or next, it might give us a good spot to buy. Otherwise, we will wait for a stronger signal to confirm May 4 as the start of a new medium-term and longer-term 3-year cycle. A new medium-term and 3-year cycle would be very bullish and could see crude prices skyrocket back towards $90 (and above) by the end of the year. For now, we remain on the sidelines of crude.