Oil receives its positive divergence upswing as Keystone forecasted and called the bottom in December. Here is that chart and technical analysis where the oil shorts were told that they will soil their shorts.
Well, what now? What now, brown cow? Decades ago, people used to say 'how now brown cow' to practice proper speech. Some cowpunk is in order. Prison Bound. So oil rallies when everyone said it would go down. What else is new? All the idiots had to do is look at a chart. It is a tricky time now for oil since King Donnie has his itchy finger on the Tomahawk button ready to start war in Iran. Trumpski bragged that he had completely destroyed the Iran nuclear program with the previous bombs but that was a lie because now he wants a nuclear deal. Bomb Iran. Everybody sing.
On the weekly chart, the green lines show the falling wedge, a bullish pattern, the positive divergence, and oversold stochastics all saying that the bottom was in for oil on the weekly basis as per the previous chart and analysis. It was. Price tagged the lower standard deviation band so the middle band at 60 was on the table and the upper band at 65.40 and both were tagged.
As oil price received the possie d rocket launch, no doubt fueled in part by some scorched shorts that wanted to cover at any price, the chart indicators remain long and strong, sans the stochastics and RSI. The RSI, however, will likely print a higher high since it has some momo. Thus, you are looking for a top to form on the weekly basis but you can see the chart indicators have gas in the tank to take price higher, on the weekly basis, even if it pulls back for a week or two, so no top yet on the weekly basis.
The daily chart becomes pertinent to this discussion. You can see the possie d bottom on the daily chart making that bottom call in December easy. Note how the RSI was playing a little game, turning possie d, but only on a couple-day basis to match the other indicators. The RSI from early October was higher than the December bottom so that is not positive divergence; it is weak and bleak. But alas, price made another low and on that day, the RSI went possie d. This drama forecasts that after the possie d rocket launch occurs, price should slump over and come down again but it should not print a matching bottom since all the indicators were possie d and wanted price to rise, and this plays out, with price going soggy to begin the year, coming way down skeptical about the RSI, but then taking off higher again and the bull run was on.
Price violated the lower band on the daily chart so a trip to the middle band at 64 was on the table, and also the upper band at 66.85, and both occur. The red lines on the daily chart show the negative divergence that formed and wants to see a spankdown in the daily time frame. Again, this is tricky business because their is an orange head in the mix that may start WW III at anytime, maybe today on Washington's Birthday. The daily chart is ready to receive a neggie d spankdown.
Thus, let's marry the two time frames since trading is like playing multi-dimensional chess only time is the dimension and not space. Keystone is the self-proclaimed Father of Divergence Trading. The daily chart is ready to send oil lower and the neggie d on the stochastics on the weekly chart, and the overbot condition, will conspire with the daily chart to make that happen over the coming days. So soggy oil is on tap for the week ahead unless King Donnie starts a war.
But the weekly chart indicators, such as the MACD, remain long and strong wanting higher highs in price on the weekly basis. Thus, mathematicians say thus a lot, that is why Keystone was told not to come to the Washington's Birthday end of winter gala at the Italian-American Club, the sogginess on the daily chart will play out over the coming days or week or two, but price will rise again to new highs to satisfy the long and strong indicators on the weekly chart.
The upside in price, however, may be limited going forward, since the 67-ish is strong resistance (yellow line). The 68 is easily doable say a couple weeks out, and that would be an important level for oil shorts to hold. If oil rises above 68, according to Keystone's 80/20 Rule, price will likely seek 72. For now, let's keep the price in check and topping out at 68-ish in a couple-three weeks.
Thus, bringing the chessboard together, oil should slip in the days ahead due to the negative divergence on the daily chart. This downside will be limited to a few days since the weekly chart remains long and strong. Price will come back up and perhaps top out at 68-ish, say, the second week of March as a target. But you do not have to guess. Simply watch the weekly chart and wait for it to set up completely with neggie d across all indicators, and then you can call the exact top in oil on the weekly basis.
Keystone is not playing oil long or short right now, instead simply watching it. There is a lot of drama right now with Trumpski in play so it seems best to simply wait a week or two and see how the weekly chart sets up and perhaps opens a nice window to put on a short. This week will likely also determine if Donnie boy will press the Tomahawk buttons or if he will instead slunk away under the guise that he made a great deal, the best deal in history, that will really not be much of anything. Hopefully, his greasy fingers from eating McDonalds French fries will not slip and accidentally press the Tomahawk button. How to throw a tomahawk. Johnny knew he had the perfect set-up. 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.
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