Look at the daily chart for CL, Crude. Three days ago, we were down at 85.11. Riots in Egypt, no one knows if the Suez is safe, and crude rallies 7 dollars in 2 trading days…. Oil hits the front pages as people panic, buy, and …. wait for it… if they bought at 91 or higher, are suddenly under water.
92.00 to 92.50 has been hit 8 times in the last month, and has been a sell EVERY TIME… Hello, that’s called resistance, to all those “fundamental only” traders who discount technicals…
I would continue to sell that level, with a buy stop above, of course, until it doesn’t work.
Eventually, it will rally through it and stay above it, but for the past 8 weeks, that has been the level to sell. Every time..
If something is working, stay with it until it doesn’t. So that’s my advice.
If you are looking for a break out to buy… then have a buy stop to enter the market if we settle above 92.50, not just if we trade there during the day.. Give me a settlement above that level, and I will think its time to speculate from the long side.
Longer term, ( more than 3 months) the trend is definitely bullish for crude. Crude has been making higher major highs and higher major lows since the May 20th low down at 64.24. For the last 8 months since that low, crude has been trending higher. I like that long position from a longer term trade.
Shorter term though, I am going to sell 92-93 dollar crude every time. What I’d love to see is a retracement from to about 93 to right below 80. A nice 14 dollar slap to the face of all the weak longs. People who panicked and bought at 92, because they were watching cnbc, cnn, and all the other fear based media centers.
No one ever made money following the “popular opinion” about any thing.
CER
