Market Commentary and Short-Term Outlook: Sept. Crude Oil (4-hr chart)

The bulls should take 96.33 level to regain control or risk a retest of support @ 95.53 and then 100% Fib @ 94.95

Brent and Crude tend to move to together and for now Brent is still in a high and tight bull flag. Thus, I am ST bullish on Crude. One can expect that by the time the RSI turns up, crude should take the 96.33  level, an area of confluence or multiple key levels e.g. 23.6% Fibonacci retracement, channel top, and resistance. However, a rally with a falling 50-day EMA is challenging.

Key pivot point to watch is @ 96.46 (confluence). Don’t be surprise if a rally above other key levels stop here. A clean break above this area of confluence outside the channel would trigger a buy signal (or add lots).

The RSI below 50, along with a cross of the 5-day and 23-day, already flash a downtrend. The 5-day has only started to separate from the 23-day, indicating that momentum has only started to pick up. One can expect that once the RSI turns below 25, crude should retest 95.53 and then the Fib swing low @ 94.93. There isn’t much support below this, which would trigger a sell (short) signal, with massive support @ 90.14. Carefully watch the price of Brent.

Be careful holding too many lots before Weds’ inventory report. The tropical storm Don took a more westerly course, thus, key East Texas refineries could avoid the worst parts of the storm. The weak economic data and US debt deal deadlock caused a hard sell-off last week. A covering of those short positions would add fuel to a rally.

Channels and consolidations are environment that foster false breakouts, bear or bull traps. That said, if the institutional market is into a rally, then it should not have a problem regaining control of the 38.2% Fib @ 97.10, turning momentum bullish. Otherwise, we could remain range bound for the week.

Manage emotions, manage risk, live well.

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One Response to Market Commentary and Short-Term Outlook: Sept. Crude Oil (4-hr chart)

  1. lima99us says:

    Volume (and momentum) was also anemic in the first 5 min, hinting that it won’t break the 61.8% Fib level.

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