WTIC West Texas Crude Oil Daily Chart H&S Pattern
West Texas oil, crude, received a spank down in late January due to the rising wedge, overbot conditions and negative divergence. Price continues to leak lower. An H&S is in play now, yellow lines, with head at 98, neck line at 95.5, that targets 93, which is very strong support. Watch to see if price drops under 96 today, then under 95.5, if so, that places 93 in play moving into next week. The Brent oil to WTIC spread is increasing as Brent oil is staying more buoyant due to Middle East unrest. The Syria situation is shameful with over 60K souls losing their lives thus far. The refugees are threatening a collapse of the neighboring countries and all this turmoil and upset may ignite the entire powder key across Norther Africa and the Middle East. So Brent remains elevated. Use it as proxy for Middle East turmoil. WTIC is likely more reflective of a weak global economy. If the H&S plays out that will verify that the economic environment is weak. Watch 95.50. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added 2/8/13 at 2:29 PM: WTIC oil dropped under 95.50 minutes ago but recovers now printing 95.67. Keep an eye on it since the ruptured 95.50 neck line leads the way to 93. Crude at 95.45 and Brent oil at a lofty 118.71 right now is a spread of 23.26.
I almost longed into the 95.50 zone but it's just not worth playing with this because when it gets ugly it gets ugly quick kind of instrument that can take your whole weeks profits in a few minutes if it breaks. The pit session is closed now so its not going anywhere for now next will will clarify things got a lot of reading to do this weekend. Thanks KS don't hurt the back with all the shoveling of snow blowing.
ReplyDeleteYes, commodities are tricky. The space is interesting and it seems like it would be more straight forward to trade but it rarely is. The spread on crude and Brent is going to get a lot of attention.
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