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WTI Crude Oil Inverse Head & Shoulders Pattern

I continue to monitor the potential Inverse Head & Shoulders Bottoming Pattern that was highlighted recently in the trading room. On watch for a continued move up to the neckline, ideally on above average volume, in order to finalize this potential right shoulder.

$WTIC daily Aug 15th

$WTIC daily Aug 15th

 

Zooming out to the bigger picture, with this 20-year weekly chart of $WTIC, the longer-term bullish case that I've maintained throughout 2016 is still very much intact at this point. While a break below the August lows wouldn't dampen the longer-term bullish outlook, it would likely destroy the symmetry of this IHS bottoming pattern unless it occurred very soon & only slightly undercut the August lows in crude oil.

$WTIC weekly Aug 15th

$WTIC weekly Aug 15th

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Aug 15, 2016 11:41am|Categories: Gold & Commodities|Tags: , |3 Comments

3 Comments

  1. alshaw August 15, 2016 1:27 pm at 1:27 pm

    oh can not have oil chart saying up and sp iwm qqq going down aint going to happen

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    • rsotc August 15, 2016 2:17 pm at 2:17 pm

      That is the conventional wisdom (which is somewhat of an oxymoron when that term is applied to the financial markets). However, I should point out that:

      1) At no point in history have we seen such distortions to the financial markets as we are seeing today due to the unprecedented intervention in the financial markets by global central banks. Therefore, I wouldn’t bet too hard on historical correlations between certain assets classes playing out in the foreseeable future as they have in the past. Case in point: Dr. Copper has been stripped of his medical license in recent years for losing his long-standing ability to forecast (or even confirm) the future (or current) trend of the market (along with many other recent disconnects of strong historical correlations in recent years, such as that between commodities & equities).

      2) Let’s also not forget that following the stock market peak in Oct 2007, while the S&P 500 fell by over 21%, crude soared by 77% over the same time period. This doesn’t mean that the bullish crude/bearish equity scenario will or must play out, only that it certainly can, at least for a very large price differential between the two, particularly in scope, even if not so much in duration.

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  2. j1persi August 15, 2016 4:14 pm at 4:14 pm

    You got served

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