April Nymex crude oil futures (CL J3) prices last week hit a fresh nine-week low as bears are in near-term technical command. A higher U.S. dollar index has been a bearish factor for crude oil recently. The next near-term upside price breakout objective for the crude oil bulls is producing a close solid chart resistance at $92.00 a barrel. The next near-term downside price breakout objective for the crude oil bears is to produce a close below solid technical support at $87.00.
Crude oil is a very important “outside market” that has had a significant influence over many other markets in recent months. Such will likely continue to be the case in the coming months. My friend and market analysis software pioneer Louis Mendelsohn has been studying this markets relationship phenomenon, called Intermarket analysis, for decades. No trader should overlook or underestimate the importance of the Intermarket phenomenon.
From an Intermarket analysis perspective provided by VantagePoint Intermarket Analysis software, it appears April crude oil futures prices will continue the near-term downtrend.
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 April crude oil that the Predicted Medium Term Crossover study shows the blue predicted 4-day exponential moving average is below the actual black 10-day simple moving average close, which is a near-term bearish technical signal. Both lines are also trending lower, which is also a bearish clue.
The Predicted Medium Term Crossover is the predicted 4-day exponential moving average of typical prices two days ahead (P4EMA+2) crosses above or below the actual 10-day simple moving average close (A5SMA).
It’s the early technical clues such as the Predicted Medium Term Crossover, provided by VantagePoint, which are so valuable to traders in their quest for consistent trading profits.
Also see at the bottom of the daily chart for April crude that VantagePoint’s Predicted MACD (PMACD) is in a bearish posture. The PMACD is a trend-following momentum indicator calculated by subtracting a 26-day exponential moving average from a 12-day exponential moving average. MACD Trigger (Trigger) is a 9-day exponential moving average of the PMACD.
When the PMACD line crosses below its trigger line, this predicts a possible reversal of the current uptrend to a new downtrend. When the PMACD line crosses above its trigger line, this predicts a possible reversal of the current downtrend to a new uptrend. Another crossover indicator occurs when the PMACD crosses above or below the zero line.
PMACD can also be used as an overbought/oversold detector when it pulls away from its trigger, suggesting the price of the market may be due for a correction that will bring the averages back together. PMACD can also be used to spot underlying strength or weakness when its movement diverges from the movement of prices.
