Check this chart out. Oil had the worst week in three years and looks like it is engulfing four previous bullish week. Has anyone come across any pattern like this before? What's the significance.
Here's my perspective on this. Saudi Arabia increased output by 500k barrels per day in June. There's probably a lag of a month or two before that output comes out of the ground, gets onto ships and into the market. So, here we are 1 month later, and already we're seeing some downward pressure on the market, by August, we should see 115.
OIL Bull Euro Up - COT report shows build up (USD down) Gold Up - COT report shows build up (USD down) Hurricane Season soon Oil sell off was sparked by BUSH drill drill speech, which is just talk Volume descending as price falls ( see USO and OIL) Middle East issues at any time Another Bank goes sick (Leh) , forcing hard assets a preference FNM and FRE dilution of equity, bearish for banks. OIL Bear China - no cars before Olympics Demand destruction in USA One side trade Selling Momentum My bet OIL is up from here, USD fall will be its motivator to go sideways to up. Mon or Tues the key, to break momentum. Oil is acting like GOLD when it hit $1000, profit taking only !
not that T.A. works all the time but on a weekly chart of spot crude I am getting a fibo retracement of $110 perhaps some of this was related to the expiry of august crude however if oil cannot rally more than $1.00 in the next 24 hours you might say the shorts are still calling the shots and longs are liquidating at losses or with far less profits than a week ago
This pattern is nothing for a commodity in a parabolic move. Seen it dozens of times. Look at a 35 year history of any population of commodities, and about half of em have gone fully parabolic at one time or another. Usually the first probe down doesn't last. Based on that, I expect to see another rally which will either set a double top, more or less, or just blast through and keep going. Imo, this sell off won't last much longer, but I don't really think we are going to the moon either, as people will simply stop driving (demand destruction will get severe). I'd like to see a blow off top first, more than anything else. Maybe a big 'ol hurricane or Iran getting frisky in the Gulf of Hormuz.
OIl is super bearish short term. If you're already short congrats, cover tues @ the close. Didnt anyone else get the memo?