WTIC COT (Commitments of Traders) and Candlestick Weekly Charts

Americans are noticing the rise of gasoline prices at the pump now that oil has rallied since December. When consumers become anxious about higher gasoline prices, they begin spending less, which hurts retail sales and the economy. The weekly oil chart is bullish.

Warlord trouble is ramping-up again in Libya so oil prices rise steadily. The PBOC, China's central bank, is pumping their markets and economy with easy money this year so oil and copper run higher as investors expect global demand to increase due to more central banker largess. The central bankers are the market.

The green circles show bottoms in oil prices and the red lines show the tops. The COT data lags. The assumption is that a near-term top is likely at anytime but the uptrend should continue a few more weeks. The drop in oil in Q4 was record-setting. So is the recovery in Q1 with price now moving up into the apex of the orange rising wedge which is a bearish pattern.

With the higher highs in price, the chart indicators remain long and strong so the oil party should continue after a minor pullback perhaps instigated by the overbot stochastics and money flow. Price has violated the upper band so the middle band at 55 and rising is on the table. This is also the 20-week MA support which needs to be shown respect with a back test. Ditto the 50-week MA at 62.51. Ditto the 200-day MA at 61.67. Oil is currently trading at 64.64 on Tuesday morning, 4/9/19.

When the Libya warlord problem is resolved, prices will drop. The charts are a mixed bag for oil. The weekly chart clearly wants to see higher highs on a weekly basis going forward so oil prices will likely remain buoyant during April. However, this current multi-week rally will run out of gas, say later this month or early May and that will likely begin a multi-week decline.

The monthly chart is chopping sideways. The 200-week MA at 68 is uber strong overhead resistance. The 42 level has played the role of support for the last 4-1/2 years. Big picture-wise, oil will likely move through 42-68 for the next couple years. When the recession hits and realization that demand is not as strong as expected, prices will retreat to the lower end of this range.

Keystone is not trading oil currently. It is a tricky playground. News events throw prices to and fro. The daily chart appears to be topping now in the daily time frame probably this week. Oil may retreat to 60-63 for the back kisses but then recover and move higher as per the weekly chart. The higher highs in price going forward, however, may be incremental. The white horizontal line which is oil's current price is formidable resistance.

So, if nimble, a short may be played say starting two days from now, oil prices should then peak this week and fall into next week, and the trade has to be ditched or flipped to the long side say from next week forward through the month. Then oil will set up for a nice trade to the short side for a few weeks probably topping-out late this month or early May. Keystone has no plans currently to play in this arena. 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: COT chart is provided by Cot Price Charts and annotated by Keystone.