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Sunday Evening Market Comments

I returned from from my weekend trip later than expected tonight but in reviewing the charts, I really don't see much worth highlighting that wasn't already covered in the video as well as the other updates posted on Friday. Here's the my daily chart of $WTIC (crude oil) as of Friday's close showing the impulsive move back down below the key $50 level, which came immediately following the backtest of the recently broken bearish rising wedge pattern.

$WTIC daily June 10th close

$WTIC daily June 10th close

 

All in all, textbook bearish technical developments in crude oil: Bearish rising wedge breakdown, failed breakout above the key $50 resistance level, successful backtest of the rising wedge pattern with impulsive selling which helps to validate the bull trap scenario. Also keep in mind that the failed breakout in crude coincided with (although not coincidentally IMO), with the false breakout/bull trap in the equity markets as crude & US stocks have traded nearly in lock-step throughout most of 2016.

As it's late, I just wanted to get this chart out and also mention that crude futures are trading down fairly sharply (1.4%) right now which, unless those losses are reversed & then some by the open tomorrow, only further helps to confirm the bull trap scenario, likely opening the door to a continued move down to any or all of the following price targets ($WTIC): $46.88, 43.60 & 42.40.

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Jun 12, 2016 10:01pm|Categories: Equity Market Analysis, Gold & Commodities|Tags: , , |4 Comments

4 Comments

  1. pangblood June 12, 2016 10:07 pm at 10:07 pm

    Thanks for the update Randy, these weekend comments really help prepare us for the market open

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    • rsotc June 12, 2016 10:39 pm at 10:39 pm

      Anytime. As I returned home later than expected tonight, I just wanted to make sure the big 3 (stocks, gold/gdx & oil) were covered heading into this trading week. Starting tomorrow morning & into the week, I’ll work on highlighting any standout sectors and trade ideas. Have a great evening.
      -Randy

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  2. pangblood June 13, 2016 3:35 am at 3:35 am

    If I may add some comments, Oil on the hourly looks very oversold, so we may see some sort of healthy pullback. Gold, also challenging the 1280 resistance area, perhaps retest wedge @1311?

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    • rsotc June 13, 2016 9:16 am at 9:16 am

      pangblood- Regarding a healthy bounce (which I assume you meant) in crude, while anything is possible, I don’t think so just yet. First off, the $50 breakout failed breakout just occurred a couple of sessions ago. As that failed breakout was on the daily time frame, my expectation would be for more downside before a “healthy” bounce (of course, minor counter-trend bounces on just about any trend are par for the course). Second, my read on the 60-minute chart of $CL looks like crude might have formed a bear flag continuation pattern overnight which looks ripe to break down soon. Even if that flag doesn’t play out, it still appears to me that a continued move down to the at least the 47.50 area is likely before a significant reaction. I could be wrong but that’s my read on crude right now.

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