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CL (Crude Futures) Bearish Rising Wedge Pattern

$CL (crude futures) look poised for a pullback to at least the 46.75 level (first target) & quite likely the 45.90 level (second target) or beyond if/when prices break below this 60-minute bearish rising wedge pattern. Comparable price targets on USO would be 11.50ish & 11.25ish with a continued move down to the 10.70 area on USO a very likely target over the next week or so.

CL 60-minute May 17th

CL 60-minute May 17th

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9 Comments

  1. Gaucho May 17, 2016 2:58 pm at 2:58 pm

    Hi Randy, could this bearish in CL could impact (bearish or bullish?) PEIX ?
    Regards

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    • rsotc May 17, 2016 3:12 pm at 3:12 pm

      It could although there are times where the ethanol producers seem to be trading out of sync with crude prices so it’s hard to say if PEIX will drop if crude breaks down.

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  2. jupiter May 17, 2016 3:01 pm at 3:01 pm

    Is there another ETF we can trade other than USO, because of the K-1 form at income tax time for USO? Thanks much.

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    • Art May 17, 2016 3:04 pm at 3:04 pm

      Hi Jupiter use USO puts for an idea

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    • schooner May 17, 2016 3:12 pm at 3:12 pm

      I also avoid trading stuff that will give me K1s in taxable accounts. You could trade the futures but I wouldn’t do it if you aren’t an experienced futures trader. Crude futures are kind of a world of their own.

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    • rsotc May 17, 2016 3:19 pm at 3:19 pm

      jupiter- It seems that most commodity based ETFs are structure as MLP’s which kick out those K-1’s. Even OIL (a more direct play on $WTI than USO) issues K-1s if I recall. As Art suggested, there’s always options although I strongly urge anyone not experienced & familiar with options to avoid them or at least learn as much as you can before sticking your toes in the water with trading options.
      Although not a direct play on crude, you could trade XLE, XOP or any of the other non-MLP energy related ETFs as the energy stocks will likely fall if crude does.

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  3. schooner May 17, 2016 3:20 pm at 3:20 pm

    I don’t know — USO has broken out of its’ larger wedge pretty clearly and crude just broke to new highs taking out the 48.40 pivot. If you put a parallel line on the USO it looks to me like it can trade up to about 12.50ish. I’ll post a chart.

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  4. jupiter May 17, 2016 3:35 pm at 3:35 pm

    Thank you Art, Schooner and Randy, for your fine comments;
    I will look at XLE and XOP as “substitutes” at this point, although eventually I
    would like to do the USO on options when skilled.

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  5. irawood May 17, 2016 5:23 pm at 5:23 pm

    the k-1’s are especially a problem when you receive them after you have already done your taxes. They do not have to have them out by january 31

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