The tight consolidation continues for Crude Oil prices. In our view, this narrowing range is setting up for a potentially explosive move. The direction, however, is still to be decided. When looking at the chart, a breakout of resistance should lead to higher prices, while the behavior patterns of crude oil historically leave the door open to a vicious rollover. It’s just the way crude oil behaves. It’s out there trying to punish the most amount of traders possible.
Think about it, we’re hearing less and less people these days discussing crude oil prices. Why? Because it’s been a sloppy mess for years. Both the bulls and the bears have lost money in this thing. And no one likes discussing their losers, that’s no fun. Let’s talk about Tesla or S&Ps. Crude Oil? Nah
But this frustration by both sides of the trade sets up for a big move. And I think it should happen pretty soon. We’re watching this resistance from the down trendline in Oil from last Fall’s highs. If that gets taken out, I think we could potentially see 110 within a short period of time. To me that’s probably the higher likelihood based on the amount of times that prices have bumped up against this level. But we still need to keep an open mind and tight stops on any purchases. A reversal in oil takes this back into the 70s.
I think the levels are pretty clear. This narrow range won’t last forever. I’d expect a big move out of this soon.
Tags: $WTIC $USO