The September Nymex crude oil futures (CL U3) have seen prices back off sharply from the early-week high that was also a 14-month high. The crude oil bulls are quickly fading. The next downside price objective for the bears is pushing prices back below major psychological support at $100.00 a barrel. Such would give the bears more technical power and it would also suggest a market top is in place.
The crude oil market is an extra important “outside market” that impacts many other markets on a daily basis. This is also called Intermarket analysis. My friend and respected industry professional Louis Mendelsohn has been studying “Intermarket analysis” for decades.
From an important Intermarket analysis perspective provided by VantagePoint Intermarket Analysis software, it appears there will be more downside price action in the crude oil market in the near term.
VantagePoint is a valuable trading tool for which a trader can glean clues on potential near-term price trend changes or continuation of present trends. These near-term clues provided by VantagePoint can and do give a trader a key edge.
See on the VantagePoint daily bar chart for September Nymex crude oil futures that the Predicted Medium Term Crossover study shows the blue predicted 4-day exponential moving average is just now crossing below the actual black 10-day simple moving average close, which would be a near-term bearish signal.
The Predicted Medium Term Crossover is the predicted 4-day exponential moving average of typical prices four days ahead (P4EMA+2) crosses above or below the actual 10-day simple moving average close (A10SMA).
Also see at the bottom of the daily chart for September crude oil that VantagePoint’s Predicted Neural Index (PIndex) is also in a bearish mode, with a reading of 0.00. The PIndex is a proprietary indicator that predicts whether or not a three-day simple moving average of the typical price will be higher or lower two days in the future than it is today. The Predicted Neural Index compares two three-day moving averages to one another – today’s actual three-day moving average with a predicted three-day moving average.
When the predicted simple three-day moving average value of typical prices is greater than today’s actual three-day moving average value, the Predicted Neural Index is “1.00,” indicating that the market is expected to move higher over the next two days. When the predicted simple three-day moving average value of typical prices is less than today’s actual three-day moving average value, the Predicted Neural Index is “0.00,” indicating the market is expected to move lower over the next two days.
The Predicted Neural Index is either correct or incorrect so its performance can be measured in terms of percent correct to produce the accuracy statistics cited for VantagePoint, which has a predictive accuracy rate of around 85% across a wide range of markets and time spans in ongoing research.
