Monday, July 4, 2011

WTI Crude Oil Analysis 9:00 PM CST 7/4

(Chart 1 - WTI Crude Daily Zoom)
(Chart 2 - WTI Crude Daily)

Amazing that a line drawn between 11/17/2010 and 02/15/2011 would be relevant on 06/27/2011, but it was. This line is the low line of the bullish channel (light blue) drawn on the daily chart. Price broke out of this channel when it gaped up on 02/23/2011. After the May/Jun 2011 crushing, we got back inside it, and the recent low fell right into the low line, as we failed there, headed higher, and still haven't really looked back.

With this snapback rally of the last week, we are now also back inside the dominant bearish channel (magenta) as well. The current trading range is defined as 92.22-95.14.

With all of this out there, here is my analysis:

Price is very fair here according to both channels, and is neither overbought or oversold.
The upper wicks of the last 3 sessions (as well as this current one), suggest that the upper bounds of the trading range are being respected. Until we close over 95.20, I think crude can be sold with a target of 92.25. I would rather not touch it though, see what way it moves, then trade it from there.

Here is the "Crude choose your own adventure"
1. We respect 95.20 and head lower
- If we do this sooner rather than later, the low of the bearish magenta channel and the low of the trading range should support the selloff and attract buying. All of this being said, the light blue uptrend line, should still be considered the be all end all ultimate support for any buying.
2. 95.20 resistance does not hold and we head higher
-Even if number 1 occurs and we head lower, once that sell off is exhausted, the following analysis still holds. I expect crude in the next 2 weeks to close above 95.20. July 20th presents an interesting set of circumstances. On that day, $100, the top of the bearish magenta channel, and the top of the bullish blue channel will all align. This is extremely powerful, and any move into this range around that time should be sold with good confidence.

Silver to Move a Bit Higher Before Next Selling Opportunity. 8:30 PM CST 7/4

(Chart 1 - Silver 60 min Zoom )
(Chart 2 - Silver 60 min)
(Chart 3 - Silver Daily Zoom)
(Chart 4 - Silver Daily)

Lots of charts. Lets get to it!

60 min silver shows that 33.80 will be a strong place to buy for the immediate term.
It is the top of the current lower trading range (33.40-33.77), as well as the deep 62% fib of the most recent up move (33.80).

Should this buy zone be violated in the next few days, 32.80 should provide very strong initial support

Any run up into the upper trading range (34.97-35.34), should be met with strong selling, as in a few days, it will also coincide with the top of the governing bearish channel (magenta on all charts)

Right now we are in the middle of the channel. "Master the Markets" VSA(volume spread analysis) says that the bottom quarter of a channel means it is oversold and the top quarter is overbought. I would like to see it more overbought/sold near probable support/resistance before I take any serious position. (p.s. if you aren't familiar with that book "Master the Markets," pick it up... highly advised for any trader)