Monthly Oil Outlook with ICT Market Structure
Updated
Similar to my linked Silver market structure, Oil is looking similar as well. We hit 2008 lows, but if we were to bottom here in the long term it won't be without much messing around and quite the contention and battleground. If this support fails, I can see the ultimate low being as low as $24 before we move back into a markup period going into the 2020's.
Typically a falling wedge, like we've seen in 2015 with oil, at the END of a trend is a nice 3 drive signal to be a bearish euphoric finish. Couple that with Brent oil hitting parity with WTI.
Fundamentally I just don't see long term how oil can remain cheap, with it being a scarce commodity and China still growing every day. Will the bottom form in 2016? Or will we have another few years of bear\chop market before the bullish trend resumes.
Typically a falling wedge, like we've seen in 2015 with oil, at the END of a trend is a nice 3 drive signal to be a bearish euphoric finish. Couple that with Brent oil hitting parity with WTI.
Fundamentally I just don't see long term how oil can remain cheap, with it being a scarce commodity and China still growing every day. Will the bottom form in 2016? Or will we have another few years of bear\chop market before the bullish trend resumes.
Note
Update with a different chart. 3 drive seems to have concluded in euphoric bottom. I wonder if we will still get more attempts at a bottom within the next few weeks to be more "stabby" like 2008 was, or if this wick of destiny forming on the monthly is all she will do. Below chart is the oil to gold ratio. Much more clear 3 drives, then breakdown. Hopefully will see resolution by summer. Mid-term target would be back into the 50's to the previous horizontal resistance we formed in May.
Note
Update: It seems like I said two months ago, we did get another stab at the bottom to retest those lows like 2008 did. It now seems like we are channeling around the support, just like 2008, and probably will do so for several more weeks. The euphoric top finish has concluded, now it is preparing to break the bear trendline. Denial here would surprise me, it seems fairly resolute on going up. Here we have a daily look... I see us continuing to range from $35 to $38 until the trendline is broken. Then it's off to $50\60.
Note
Weekly open and this weeks of trading will be very key.We have finally let bulls take profit and retraced back into a buying zone. Strong bidding infront of $35 where the rising wedge finally broke out and the real recovery began.
If this is truly bullish, expect stopruns and manipulation around that area but we should not close below $35. Consolidate, then push back up to $60
Note
Expecting a key finish up here this week for oil, with a gap opening on monday next week when the markets open. Up or down not clear, market is compressing at this extended range. Still expecting eventual bounce to $60's, next week will show us if we are going to go there straight away or if we will chop around in the high $30's and consolidate before going there.
Trade closed: target reached
Letting go profit here, hit the target close enough into OTE that the pullback risk is too great. 90% gone, letting the rest ride. Won't be interested in re-entry until at least a retest of $35 like my previous idea. Will wait for broader macro-outlook to change.
Note
Oh man this chart has aged REALLY well
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