WTIC West Texas Intermediate Crude Oil Sideways Triangle

Oil has fallen out of bed. The oil daily chart posted a couple weeks ago was looking for a bounce but the weekly chart was weak and wanted further lows. So price bounced to 82.6 intraday and then immediately failed again printing lower lows on the weekly chart. The indicators above show positive divergence with stochastics, the histogram over the three-year period and money flow in the very short term. These three should create a bounce which also jives with the possie d across all indicators on the daily chart that wants to see a relief rally.

However, the RSI and MACD line remain weak and bleak above so after a bounce in the daily and weekly time frame, says from a couple days to a couple weeks, oil should weaken again and explore lower lows but with the idea that a basing should begin since the indicators are starting to try and right the ship. The yellow triangle vertical side is 40 handles so the failure from 97 targets 57. Interestingly, the near universal consensus, like the bullishness for the stock market, says lower oil prices are great for America and will fuel a recovery. If price is at 57-60 in the future, that will be a deflationary collapse and no reason for celebration.

The expectation is for oil price to bounce in the near term, perhaps back to 80, but price will want to come back down again; overall a continued sideways malaise through 70-80 probably into the new year. A couple months down the road it will be more apparent whether lower oil prices are helping the economy recover or if oil continues to collapse indicating lower global demand and the world falling into a disinflationary and deflationary spiral. 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.