Crude Oil Bottom Likely Here Based On 2016-2017 Accumulation
Updated
Back in February this year I posted this chart here at TradingView to diagram the structure of the Crude Oil market and its potential upside along with the overhead resistance and the general timeframe to expect based on the chart at the time.
The method I have outlined here is logical and not subjective, but what I do call this is "guessing" because anytime you deal with the future you are dealing with guesses, plain and simple. What I noticed back in January is that crude oil had accumulated for many months from the low in 2016 and formed 13 months of time at one price (the mode) at the $48.25 level. Once the market climbed above or range expanded above that level on a monthly basis, the market was positioned to advance for 13 months with some strong overhead resistance from the breakdown level in 2014 at the $70-$75 level where I have marked "HEAVY RESISTANCE" in the red rectangle.
The advance did end up adhering to the time and to the resistance area. Typically after time runs out for the rally, there is a move BACK TO THE MODE at the $48 level within 13 months. So far it has done that in only 3.
Given that sentiment was so extreme at the high with heavy long positions by traders and short positions by commercial traders, this decline is testing even the most die-hard bull.
If at the end of December the monthly range is less than November, we can look to go long on a break above previous day's highs with stops under the 5-day low.
Stay tuned.
And join us in the Key Hidden Levels chat room here at TradingView to get additional updates. Or click "agree" and you'll receive updates by email automatically.
Tim West. 9:01AM Thursday, Dec 20, 2018
The method I have outlined here is logical and not subjective, but what I do call this is "guessing" because anytime you deal with the future you are dealing with guesses, plain and simple. What I noticed back in January is that crude oil had accumulated for many months from the low in 2016 and formed 13 months of time at one price (the mode) at the $48.25 level. Once the market climbed above or range expanded above that level on a monthly basis, the market was positioned to advance for 13 months with some strong overhead resistance from the breakdown level in 2014 at the $70-$75 level where I have marked "HEAVY RESISTANCE" in the red rectangle.
The advance did end up adhering to the time and to the resistance area. Typically after time runs out for the rally, there is a move BACK TO THE MODE at the $48 level within 13 months. So far it has done that in only 3.
Given that sentiment was so extreme at the high with heavy long positions by traders and short positions by commercial traders, this decline is testing even the most die-hard bull.
If at the end of December the monthly range is less than November, we can look to go long on a break above previous day's highs with stops under the 5-day low.
Stay tuned.
And join us in the Key Hidden Levels chat room here at TradingView to get additional updates. Or click "agree" and you'll receive updates by email automatically.
Tim West. 9:01AM Thursday, Dec 20, 2018
Note
On target.Note
Over a year later - and still along the guessed pathNote
Still right on track....
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