Discussion in 'Trading' started by hevaystos, Jul 28, 2011.

  1. hevaystos



    Trend lines, moving averages and RSI are our main tools in this commentary; we’ll try to identify the weight-of-evidences, pinpoint the prospected scenarios and the most important structure range to watch.

    (1) The price action since mid-2009 is being surrounded by four trend lines. These parallel trend lines worked as firm support and resistance levels; the upper parallel resistance line constituted a ceiling over prices and forced the security to lower trend lines. A breakout below any line considers a nose dive to the lower one and a breakout over any line targets the next upper line. The oil, in the last attempt, bounced strongly off the last defense line, the lower rising support line; this bounce gives a minimum up-side target near the middle rising resistance line @ 107.

    You should know that; as long as the lower rising support line remains intact, the major up-trend will also remain intact. You also should know that; the Oil may find resistance from the middle rising line, but a decisive up-breakout over it will force the security to the next rising resistance line (near 115/120). The last thing you should know is that; “a decisive down-breakout below 89.50 should triggers your Sell Stop. This breakout changes the structure completely.

    (2) You can notice that moving average is taking a bullish shape; the 50-week EMA is rising over the 200-week EMA, the 50-week EMA is working currently as a rising support, nearly in the middle between the lower double trend lines, giving additional evidence of the major importance of this zone.

    (3) The RSI “range analysis” is a unique usage which helps identify or confirm the current trend. The indicator is oscillating between two important ranges; the green horizontal lines and the yellow horizontal lines consider a Bull Support Range and Bull Resistance Range, respectively. The indicator is currently bouncing off the lower range and targeting the upper resistance range. As long as the RSI find support from the lower green horizontal line, the major up-trend will continue gaining momentum. A decisive down-breakout below it may give an advance warning of a serious change in the structure. The RSI also is giving its own signal; a “Positive Reversal” signal has been triggered- see the declining white line. This bullish signal gives a target (@ 117.85).

    In brief, market participants should watch the lower rising support line (@ 89.65) and the lower green horizontal support line in the RSI; as long as these levels remained intact, the up-trend is safe, favorable and you can bet on a thrust to at least the upper resistance line @ 115/120 range. On the other hand, a decisive down-breakout below 89.50 and/or a decisive penetration below the green horizontal line in the RSI signal a complete loss in up-side momentum and warn of a serious bearish outcome. A decisive down-breakout below 89.50 considers a nose dive to AT LEAST 81.85 @ the 200-week EMA.

    Ramy Rashad, CMT
  2. All that BS states is, if oil goes up, "See, I told you so"; if oil goes down, "See, I told you so".
    No fundamentals at all! [​IMG]
  3. The lowdown is this: 80% of the time when the dollar goes up, oil goes down and vice versa. What's interesting is the spread between Brent and WTI: Brent has been on average $13 more than WTI this year and now the spread is almost $20. Yikes!
  4. hevaystos


    Hello petsamo,

    you have to read the analysis again !! sorry, we are dealing with probabilities !!

    the trend is up and the weight-of-evidences confirms the continuation of this trend to our mentioned up-side target.

    in other words, the odds are in the favor of bulls.

    in again different words; so far, we are bullish on the Oil, but a decisive down-breakout below the mentioned structure support level would change the structure and as a result changes our view.
  5. That's better English. Didn't you know that the average American has a 10th grade reading level? [​IMG]
  6. piezoe


    One should assume a current long-term trend will continue, as that puts you on the right-side of probability. The current long-term trend is up.
  7. hen12y


    Historically brent has been about 5% underneath WTI over the last 10 year period, over the last 6 months brent has been about 20% over WTI, and the arb has collapsed to -$20. from high stocks at cushing, the WTI delivery point fed partially from the new keystone pipeline, and secondly trouble with Lybia and the middle east shutting off 1.3MMbd of production and attaching risk premium there.

    stocks certainly going to stay high at cushing unless they can reverse the flow of crude and send it down to the us Gulf, but that would mean changing much of the hardware at the costakl refineries there as the crude comming down from central USA and canada is higher in sulphyr content than the light sweet crude imported from the west african region.

    medium term the WTI-Brent arb will narrow as Europe sorts itself out, but not to pre 2010 levels as we now have keystone, long term oil has to go up, but where it goes before then is anyones guess!
  8. I think oil will keep a cap on the SPX, but given the fact that we have a lousy economy and are vulnerable to another recession, oil will follow the SPX down, if that's where the SPX heads. [​IMG]
  9. piezoe


    That seems reasonable. Looking at yearly lows one finds continuously higher yearly lows over the past decade with the exception of the anomalous 2008-2009 spike down. That spike was in December and January, and should be ignored, imo, when drawing the trendline. This indicates a 35% increase in light sweet crude per year averaged over the decade. (Probably somewhat similar for Brent). Extrapolation is always risky, but even with a sluggish world-wide economy I would still expect no less than half that over the next decade. I can be happy with a 15% return if I'm forced to be. :D
  10. It is one of the main problems that every state does face today. Because of the expensive oil importation,it does make a big problem also to the rates of the goods and commodities of the people.
    #10     Aug 1, 2011