Wednesday, June 29, 2011

Oil - part 2

Technical picture (CLQ1). Oil is below 200 day sma. It looks like it is in ABC correction inside of wave 4 on bullish Elliott wave weekly structure, and it is now in leg C (of abc), with resistance levels at: bottom of leg A @ 95.50 , 21 day ema @ 95.75 , and a major one at laminate of 200 day sma and 50% Fibonacci retracement from 6/9 high @ 96.25 . Strong support comes in @ 87ish - top of wave 1. Oil is found some support on Monday @ 50 week sma (on continuous contract chart).

There is a falling wedge with top trendline at around 97.25 - just above 200 day ema. Falling wedges are reversal bullish patterns, and most of the time result in bottoms when top trendline is broken. Am I calling for one right now? NO. Do I think oil is going back up? YES. I am going to let it breakout and will buy the pullback. Nobody knows when the downtrend stops, we are traders - not gamblers. Do not be bottom picking, all you get is smelly fingers...

And quickly lets look at weekly inventories. API reported overnight a draw of 2.7 mil barrels. EIA estimate for last week (reported @ 10:30 am EDT today) is 1.5 mil barrels draw. API/EIA correlation is @ 71% over the last 52 weeks. Lets see what happens @ 10:30 am...

WARNING: Oil trading is the hardest of the trade profession. You will be trading against some of the best traders in the world. Their job is to take your money away. If you are a newbie - stay the heck away!!! Paper trade a lot before you start real money trading. Margins are huge - with very high risks involved. You better have a very well-established account and be a pro when you do this. I guarantee that this is where the accounts are blown the most...

No comments:

Post a Comment