Crude Oil Futures – Tuesday Technicals

Crude Oil Futures Moving Lower?

In an update from the April 23rd post, Crude Oil may be primed to start moving lower in an accelerated fashion—the kind of market that offers great reward to risk taken.

Although we would have like to have seen the wave 2 pullback take Crude Oil prices up to the $64.50-area, near the 62% retracement and up against the upper boundary of the price channel on the hourly chart, all the pieces are in place for the long-term bear trend re-establish itself in violent fashion over the next few weeks.

Crude Oil Technical Analysis
June Crude Oil Futures may be moving to the downside in the near term.

Supporting Evidence:

  • Bearish Divergence between momentum and price on the daily chart
  • Wave II Retraced 62% of Initial Wave I on the daily chart (Common in wave 2’s)
  • Stayed Within Parallel Lines (Indicative of a correction)


What To Look For in Crude Oil Futures:

  • RSI Stabilizing below Bull Market Support Level of 40. Currently, it is at 40.39.  This would  signal the recent uptrend is probably over.
  • Confidence will increase with a closing price below $60.
  • The current interpretation is invalid if prices stabilize above the price channel on the hourly chart…Than is your defined risk in a short position.
June Crude Oil Futures Technical Analysis
June Crude Oil Daily Futures Chart on a Logarithmic Scale

Bullish Forces in Crude Oil Futures:

  • Geopolitics in the Middle East
  • OPEC+ cuts
  • U.S. Economy Seems to be doing well
  • IMO 2020 Regulation
  • Seasonality Until June
  • Supportive Central Bank Policy Recent statements by Federal Reserve officials suggest they are looking to determine the appropriate conditions for introducing an interest-rate cut, though one is not believed to be imminent. Federal Reserve Bank of Chicago President Charles Evans stated last week that a prolonged period of inflation below 2% would imply that “our setting of monetary policy is actually restrictive, and we need to make an adjustment down in the funds rate.”


Bearish Forces in Crude Oil Futures:

  • U.S. Production
  • Russian Talking of Turning On Spigots Again
  • Global Manufacturing Is Down
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