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Crude Bull Trap Scenario May Be In Play

This most recent trendline break should bring crude futures back to test the key 50 level (49.90 is the level that I'm watching). A solid break below will have firmed up the failed breakout/bull trap scenario that I've been favoring. Also worth noting is the tight correlation between crude prices & the U.S. stock market which would indicate that if the crude bull trap scenario plays out, with crude prices headed much lower, the stock market will likely follow. @schooner recently posted a compelling chart illustrating this tight correlation in the trading room. $CL 60-minute chart:

$CL 60-minute June 9th

$CL 60-minute June 9th

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Jun 9, 2016 10:16am|Categories: Equity Market Analysis, Gold & Commodities|Tags: , , |2 Comments

2 Comments

  1. schooner June 9, 2016 10:49 am at 10:49 am

    Nice chart Randy — which program are you using for this?

    I agree — we’re on the same page — I do think that 50.20 is also important support, but not as key as 49.90. Whichever way crude goes should take the market with it.

    Amazing the way at different points in times the market hooks up with something else — sometimes it’s rates, sometimes its currencies, right now it’s oil. Amazing the way the talking heads on CNBC continue to miss the obvious.

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    • rsotc June 9, 2016 1:18 pm at 1:18 pm

      schooner- That $CL chart was from the TWS platform (IB).

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