Sunday, April 10, 2016

WTIC West Texas Intermediate Crude Oil Commitments of Traders (COT) and Daily Charts

Market participants focus on oil since as oil goes, so goes the stock market. Here and there oil has hinted that it may decouple from the simpatico relationship with oil but then oil and stock prices will again move in sync up and down. Note how the 200-day MA ceiling keeps price in check over the last year. If oil breaks above the 200-day, that would be a significant event for oil bulls and a recovering oil market. Under the 200-day MA, oil remains toast.

The green circles show key bottom in oil prices while the red circles show key tops.The COT is at a tricky juncture since the bars are only at moderately extended areas and the bars from last week pull inward which accounts for the oil rally late last week. Price may want to come up for another look at the critical 200-day MA at 41.36 and falling for a bounce or die decision. The indicators are moving sideways, the moving averages are starting to line out sideways, oil may move sideways going forward.

Note how the 200-day is moving downward and the 50-day is moving upwards squeezing price in to force it to choose a direction. Bulls win above 41, bears win under 36 and these levels will ratchet towards each other with each passing day until price moves out of the bracket in one direction or the other.

The pink boxes show that the downward trend in price was very strong last summer and into and through the end of the year into January, but not anymore. Oil price leaps higher off the February bottom, exactly in line with the broad stock market, due to the possie d (green lines). This wild and sharp move higher is not a strong trend higher since ADX remains down at 19. Oil bulls need the ADX to move above 30 and stay above.

Looking for further guidance since the charts above are a sketchy hodgepodge, the WTIC weekly chart indicators clearly show the possie d in place when Keystone called the bottom in oil in February. The weekly chart hints at sideways basing action ahead with an ever so slight upward bias. Oil may seek a test of the 200-day MA at 41.36 to begin the week. A pull back is expected in the near term but prices should recover and print slightly higher as the weeks and months move forward. It would not be surprising to see oil move through 28-48 for the remainder of the year. There is a gap down at 30-31 big enough to drive a truck through so price may want to venture lower to fill that gap before moving sideways to sideways higher into the summer and Fall. 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: The oil COT chart is provided by our friends at Cot Price Charts a very useful site. The COT chart is annotated by Keystone.

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