WTI Crude Trade Plan (Read this section carefully for trade entry/exit suggestions)
Nov 8th 2016 Updated at 10:38 pm EDT on Nov 7th 2016
For Monday, Nov 7th, I’d written “If we fail again at the point of initial resistance which resumes its position in the 44.8~44.85 area, we will targets the gap we left behind from the Globex open at around the 44.25~44.20 price region.” We went as low as 44.11 and then reversed right back up to 45.01. In fact, if you saw my day trading targets, I’d called 45.01 as the intraday upper level which we hit way after the pit close for Crude.
As I see it now we will need a trendline break of 45.15 to get long here. While this isn’t the best of BUY signals I’ve seen in a while, shorting other than while you’re perhaps scalping, would be risky as we gradually unwind from oversold conditions. Remember that even with the overwhelming turmoil caused by the US general elections, for Crude what holds true is some basic fundamentals. In support of this we have the API inventory report that comes out at 4.30 pm EST.
Earlier today, for the downside we filled that gap at 44.20 I referred to yesterday and failed on additional moves below there or attempt the take out of the 44-price-handle.
Initial resistance at as 4505~45.15 holds great importance in overall direction for tomorrow. If we break above here on some green volume bars I would switch to becoming a buyer and target yesterday’s secondary resistance in the 45.50~45.60 price range and continuing on to perhaps at or just below 45.85. If we continue higher expect pretty decent resistance in the 46.25~46.35 price bracket and with that level it is very likely that we crest here for the high of the day.
If we fail to take out that initial resistance which is between 45.05~45.15 we negate any buy signal and stand a chance to slide quickly to 44.50~44.40 range and as far as today’s intraday low of 44.11. Of course, continuing lower beneath here targets us to almost 43.75~43.65 in continuation of oversold conditions. If you are attempting going long here – place your stop wide enough, (say 25 tics) to get you into any inverse move upwards. If you get stopped out – just get out of the way as this may be headed below the 43-handle to 42.95 initially and then 42.60 zone.
Cam Pivots for Nov 8th, 2016
R3=45.87 | R2=45.45 | R1=45.20 <-> S1=44.70 | S2=44.46 | S3=44.03
News & Analysis
Nov 8th 2016 Updated at 10:54 pm EDT on Nov 7th 2016
Crude prices fell further in Asia early Tuesday as China trade data for October disappointed from the world’s second largest importer. Crude oil for December delivery on the New York Mercantile Exchange fell 0.22% to $44.85 a barrel. Brent oil for January delivery on the ICE Futures Exchange in London dipped 0.30% to $46.16 a barrel.
In China, the trade balance for October came in a surplus of $49.06 billion, narrower than the $51.07 billion seen as exports and imports missed expectations as well. Oil prices were stable early on Tuesday after posting strong gains the previous day, with investors piling money into financial markets in expectation that Secretary Clinton would win the U.S. presidential election. In physical oil markets, U.S. pipeline companies with operations at the heart of the country’s commercial oil industry at Cushing, Oklahoma, restarted on Monday after a 5.0-magnitude earthquake late on Sunday triggered safety shutdowns.
However, traders said that financial crude markets were capped by lingering doubts over the ability of oil producers to agree on a planned output cut in order to prop up a market which has been dogged by two years of oversupply.
Oil investors will also be watching the weekly U.S. oil inventories and production data for week ended Nov 4th that API will release at 4.30 pm on Tuesday. In the previous week, as we all know now, U.S. inventories rose to a three-decade high of more than 14 million barrels, largely due to imports. The official data will be out on Wednesday.
WTI Crude Weekly Chart Analysis