Tuesday 24 November 2009
This will be the last article this holiday-shortened week, so things can change
by Friday. For now, Crude Oil is saying that it is not yet ready to move.
There was an attempted upside rally on Monday, and we were buyers early in
the morning, but price reversed, and the selling continued into Tuesday,
closing down about 150 tics, a drop of 400 from the Monday high.
One can never know what will develop after taking a position. Ours turned into
a loss, using a stop. It is a cost of business, but even after today’s drop, the
picture has not changed. Price has come back to the 75.00 area, the original
breakout over the August highs, so it is still normal retesting activity. A retest
is usually a safe place to establish a position. Our recommendation happened
to occur on the only day out of the 28 day trading range where price opened on
the low and closed lower than the open. Price closed higher for the day, leaving
room for a possible rally today, but it did not happen.
Today’s activity continues to expand the trading range without incurring any
damage to the integrity of the developing retest trading range on top of from
where the previous trading range under the breakout took place. All the factors
mentioned in previous analysis of Crude Oil remain intact.
What remains, still, is some reason to get long, if price is going to hold in the
scenario we outlined on several occasions. For now, it is lock and load and see
what develops.
