Crude Oil (CL) Uptrend held? 7/31

To the left is a 4 hour chart of crude oil. Over the last couple weeks we have been in a pretty slow grinding up trend, with higher highs and higher lows for the most part. After spending more than the average amount of time hovering around 100$ a barrel, we then saw a larger than average sell off. It appears though that we have held the previous low to this point. We can also see divergence with the MACD average in the long term (shown by the purple lines) and the histogram in the short term (shown by the yellow lines). We also saw a lot of volume stepping in when we reached the 50% retracement of this recent uptrend shown in green. I think this is going to be a good spot to buy to try to get back to 100$ a barrel.

Crude Oil (CL) Target Reached 7/19

Hourly chart of Crude Oil (CL) to the left. In a post yesterday we pointed out we had reached the bottom of a channel and the lower fib retracement from the previous downmove. We also looked to target the upper end of the channel around 98-99 from this buy and this morning we have already reached this area. While ultimately I think the breakout of this channel might be to the upside, I personally will lighten my position here and then wait for any bearish candlestick formation or divergence to form to pull the rest of this position off. If the signal forms inside the channel / retracement area then I might look to reverse my position too.

EDIT: An hour after this post crude formed a nice shooting star off the top trendline and I have exited my position. I might look to go short soon as well.

Crude Oil (CL) Lower end of channel

To the left is a 4 hour chart of crude oil. As you can see, we have been in a little bit of a channel for the last week or two (shown by the yellow trendlines on chart). It seems like currenlty we are at the lower end of this channel, which also lines up with the 38% retracement of the prior down move (shown in green). We also see a little bit of divergence between the two recent low peaks as we dont quite take out the previous low and our MACD has gone further than the previous down peak. It also looks like we are somewhat holding these green retracements, so I would look to take off at least half of this position at the 61.8% or about 98$ range.

Good Entry to Sell WTI Crude? 9:25 AM CST 7/12

Here we have a 15 minute crude chart.

Crude is back at its 95 resistance.

The last 15 min bar was a strong shooting star right off of the resistance.

We also have hidden divergence with the MACD and price (see the white sloping line on MACD and price) which is confirming this peak might be a peak.

Further confirmation is the relatively high volume that bar had as well.

I sell here (95) stop at 96 and target 92.25

EDIT: Stopped out for .2% of account lost. Will stay on the crude sidelines for now

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.

WTI Crude Oil Rejecting 92.25 Key Resistance. 10:05 AM CST 6/28

(Chart 1 - WTI Crude 60 min)
(Chart 2 - WTI Crude Daily)

92.25 is a very important level. Today we rallied into 92.19 and couldnt get over it.

Last few hrs on the 60 min chart have very long upper wicks on the candles when it gets near 92.25, indicating continued selling interest at that level.

On the daily chart, 92.25 is also near the low line of the old bearish channel we were in (magenta channel).

I shorted oil here and look for a move back to 90 initially and ultimately a target of 87.50 is very feasible.

WTI Crude Oil Update 6:54 PM CST 6/22

(Chart 1 - Crude Daily Chart Zoom)

92 proved to be very strong support on a closing basis a few days ago. It is the bottom of the current trading range (92.25-95.25) and also coincided then with the low of the current magenta bearish channel crude is currently trapped in.

Where do we go from here is the obvious and important question? Let me start by saying that anything you do in crude at these levels should be kept light and your fades should be wide.

95.25 is the obvious resistance, as we are trapped in this trading range. However, I feel we will breakout a bit to the upside and challenge the midpoint of this channel (dotted magenta line).

I feel anything from 95.25 to this midpoint line will be a good sell for a move first to 93.75, and then an eventual retest of the 92 level. If you find yourself selling at around 97 (where the midpoint line is currently), then consider covering some back at 95.25, as this may be a pullback before we make a run at 100....

I am indecisive because of the hammer candle we put in at the 92 lows and what support it came off of. I feel this rally can be sold. However, I am cautious as that candle on the low of a down move can cause a sharp reversal, and crude always likes to move.

The point at where I begin to seriously doubt the short case is when we close above the midpoint line.

Crude Oil (CL) Showing similarities to 2008 6/18

To the left is the daily chart of crude, side-by-side is the 2008 sell off with the 2011 sell off were in right now. I think the similarities are pretty important here, as we look at the 2008 sell off, we can see in the MACD a prolonged time of the MACD being above 0, and showing divergence (shown in yellow) as we reach its ultimate high (@147.27). The same can be seen for the most recent run up to our high (@114.83), and while there are a few other times this has happen, none of them have been met with divergence that sold it off quite like these two examples. Now we look at the MACD on the 2008 chart and see how after breaking through the 0 line, we reject the 0 line twice during the subsequent sell off. Scanning the last 10 years of data, I don't see any other periods where we have a prolonged time well over the 0 line followed by rejects of the 0 line to the upside like we saw in 2008. In 2011 we now have seen the first reject of the 0 line after breaking through it and look to head lower. I think oil is in store for another run lower and going back to an older post a target of at least 85 for the next move.

Crude Oil (CL) Slow Day 6/16

A chart of the hourly crude oil shown to the left, you can see a zoom up of todays action (if you can call it that). The purple and green lines can be seen in my post from yesterday and what they are. Basically we stayed below the purple line which had provided support for the last few weeks of range trading and above the green line which is the 50% projection of the potential down move. We really saw nothing today, a few attempts to go both ways but nothing interesting and we dont think it can stay in this tiny of a range too much longer, expect a breakout one way or the other.

Crude Oil (CL) Repeat of May crash? 6/15

On the left is a long term view of an hourly chart for Crude Oil, starting with the sell off in early may from its highs at 114.83 to today's activity. The purple channel is a regression channel drawn from its low after May's sell off to today, with 1st and 2nd deviations shown. We can see its stayed in this channel really well over the last month plus, and the only three times it has broken below (circled in white), it snapped right back and did so well before the markets settled for the day. We notice that today's trading has broken this channel and has sat outside of it now for a good amount of time and settled. I also present the previous two lulls in price preceding the massive sell off on May 5th, highlighted in yellow. While todays preceding price action was quite a bit more than the others, you can see how there is almost no retracement in these moves and just a straight sideways channel until the next sell off, similar to what we are currently forming. With all that said, The green extension is the price extension from the highs @114.83 to the lows of the meltdown, projected off the highs in the channel. We are currently sitting on the 50% projection, and while its a bold projection, I could see oil selling off hard to the 85 level very soon. We've discussed playing straddles or strangles in the option markets on oil, and it looks like that might pay off, and if you are still looking to play this, I would look to cheap option puts on bullish etfs.

Snp, Gold, Oil, Silver, All at Key Resistance 9:20 AM CST 6/14

Quick update

Snp september future currently 1281

WTI currently 98.15

August gold currently 1523

July silver currently 35.19

All of these are either just under/over or at very important resistance.

I resold all of them.

Any real move higher from here and I will have some serious thoughts about staying short.

WTI Crude Oil Trading Ideas and Thoughts 9:00PM CST 6/12

(Chart 1 - WTI Crude Daily Zoom)

(Chart 2 - WTI Crude Daily)

Friday's session gave us the start to the selloff I was looking for here (all be it a day or 2 late but better late than never)

We stalled right at the bottom of the current bullish channel (light blue on these charts)

The bottom of this channel, is also the neckline for the current head and shoulders developing in crude.

Here are my thoughts:

Since the May 5th crude collapse, We have been in a range of 105-95.

We have made 3 lower highs since of roughly 104.5,103.5, and 102.5.

Every time we got down to 95 it had shown tremendous buying strength.

My gut feeling is if we get down there again this week or next, the sellers will overwhelm the buyers.

Now for trading ideas:

1. First of all let me start this by saying I ABSOLUTELY HATE CNBC. They are nothing but a bunch of cheer leading shills who lose what little credibility they have day by day. However, from time to time their guests drop nuggets for those paying attention. One such nugget was dropped Friday afternoon, when a guest proposed buying a strangle on oil. (a strangle is an options position where you buy an out of the money upside call and an out of the money downside put. You are making a bet it will break out of a range.)

Sandwich and I love this idea. We have been talking about it all weekend, and will certainly put this on when equities open this Monday, if crude is still at these levels. I like buying 106 calls and 94 puts (We will do this in USO most likely so do levels in that that correspond to these crude levels). I think crude is headed lower, but I could also see how it has lots of room to the upside if it decides to go. Long story short, it is in a pennant (see the burgundy trend lines hugging recent price candles). More often than not, things in pennants get squeezed to a point and then breakout hard one way or the other. We feel this strangle will profit from a breakout of this type.

2. Sell crude on a break of the neckline referenced earlier. Target just south of 96. Stop with a close over 101 or a hard stop of just over 102.

Crude Oil (CL) Providing another short opportunity? 6/9

So a lot going on in this hourly chart of crude on the left, so lets break it down. It looks like we are kind of holding the retracement of the recent down move (the purple) at the highest level, we also seem to have ultimately topped out at a previous peak (@101.9, shown in green). While we are not quite up to the trend line in yellow that we spotted in a previous post, its close and this will provide an ultimate "I'm wrong" line in the sand. Lastly we are showing some continuation divergence in the MACD (shown in light blue) as the oscillator pulls back farther than its previous peak with the price not making a new high. I think this is a good opportunity to try to pick up a few dollars on oil.

Another Chance to Sell WTI Crude Oil? 8:20AM CST 6/8

(Chart 1 - WTI Crude Daily Chart Zoom)

(Chart 2 - WTI Crude Daily Chart)

Opec can't reach an agreement and oil rallys right into resistance.

I call bullshit and look to sell this on a technical basis

see my previous post here

WTI Crude Oil - Bullish Channel Downward Break 7:00AM CST 6/7

(Chart 1 - Crude oil daily chart zoomed)

(Chart 2 - Crude oil daily chart)

Having rejected 100 yesterday and sold hard into and just through the light blue up channel, we have the high of the current session at just under this light blue channel line.

This line will now be ultimate resistance for crude shorts

any close back into this channel and the shorts need to cover I would say.

I would target 95.50

(Note: I am looking to add to my current short crude exposure if it rallys at all near this 99-100 level today)

Crude Oil (CL) Put in an upper trendline? 6/6

The daily and hourly chart for crude oil hasn't changed much as it idles between the 101-98.5 range over the last couple sessions. Looking at the daily chart, the biggest support will most likely be found at the 98$ area where we have a couple lows that nearly got there and the 61.8% retracement of move up from the lows put in may 6th. On the hourly chart, it looks like we might have put in an upper bound trendline, now confirmed by three points (In yellow), and the last two points on this line were met with divergence in the MACD shown in yellow too. I think a break of this trend line and we head back to muddled middle ground, but otherwise I see this getting to the 96-98 level in the near future

WTI Crude Oil Daily Chart Weekend Look Ahead 6/5

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

As expected, crude oil is making a battle around the $100/barrel level.

It looks like it is starting to form the 2nd shoulder of a head and shoulders (H&S) pattern.

The light blue bullish uptrend was in place well before this H&S developed.

However, it tracks the "neckline" of the H&S perfectly.

This line, as well as the midpoint of the current bearish channel (magenta dotted line), provided good support on Friday. We then rallied back over 100.

I personally sold this rally and feel crude will hold under 101. I need to see it close under the light blue uptrend line before a close over 101. Should this happen, I look for a test of the 95-96 area that has shown tremendous buying strength in the past. However, I feel if we get there again, we will get through it and test roughly 92.50. Also, I think if we get to 94 or less, any subsequent rally can be sold with 95-96 being very strong resistance.

Crude Oil (CL) Struggling to break support 6/3

Crude oil hourly chart on the left has shown some problems getting through a major support zone (@98.20-98-40) for the last couple days even with lots of bearish news coming out. If you have been short already this might be a good time to pull some off as there is a good chance this will hold. If we can finish in the low 99's I think we will eventually break through this support next week, but if we have another strong finish like yesterday, than be weary and light on any short position.

Crude Oil (CL) / Natural Gas (NG) Update 6/2

On the left is an hourly chart of Crude Oil (CL) and the right is a daily chart of Natural Gas (NG). It looks like after a very bearish build in oil, we have seen a continuation of yesterdays sell off, and have broken through 100 and are headed to the lowest end of the up moves retracement (in purple, @98.21). I think this will eventually break through here and end up near recent lows @96. Natural gas, I had posted the other day that the yellow trend line might give resistance and the long position suggested should probably be taken off. It looks like after a bullish build in inventory, that we have gone right through this resistance and might be looking to break out to the upside.

Crude Oil (CL) Short opportunity 5/31

Dolemite posted earlier that crude was entering resistance and I also agree and further that this might be the time to sell. On the daily chart on the left hand side, we can see the yellow trend line that had been used as resistance and support multiple times is the high for today, we also run into the lowest retracement of the May sell off. Looking closer on the hour chart we are seeing strong divergence in the MACD, shown by the purple trend lines. We also have a nice shooting star at the top of the hour divergence, always good to have a candlestick signal before you take any divergence for entry. I like shorting it here and at least taking it down to 100, if not to the bottom of this channel (@96)