TIME AT MODE IN CRUDE OIL DAILY MARCH 18 2021 818AM ESTHere's a quick TREND ANALYSIS using a simple method I like to call "TIME AT MODE" in the current crude oil market. I'm using the April 2021 futures contract to do the daily analysis.
FIRST, notice that the crude oil market has not made a new high in over 5-days. That observation makes me look for downside trades in crude oil by first finding the "mode" since the high and then working from there. Here are the steps to analyze the setup.
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Here's a CLOSER look at $CLJ2021 April Crude Oil
ONCE there are 5-days without a new high, put a trend arrow at the peak, then work forward from there...
From that first 5-days, there is a mode that I have labeled "4d" for 4-days at this price, which is the highest 4-day mode since the peak/start of the downtrend
There is a RgExp decline that I have labeled with the yellow triangle, marking the start of the 4-day downtrend (which ends today)
Since that first "trend day", the "RgExp down day" with the Yellow Triangle... there has been minimal follow-through and that has allowed the MODE to drop to the "7d" mode you see labeled there just under $65 at $64.96 (the high of the "lowest range" day last week on Wednesday).
There is a chance that stocks are leading $USOIL down here, so it could just be taking its time or perhaps crude oil longs don't care about the drop in stocks now that the stimulus bill has passed.
The 7-day mode hasn't confirmed yet by RangeExpanding down to kick off a new 7-day decline from the $64.96 level....
The RgExp level is where the market is down MORE TODAY than YESTERDAY'S RANGE...
Tim West, March 18, 2021 8:18AM EST
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I will follow up this chart with another chart discussing the 7-day downside implications for Crude Oil. Simply stated, measure the "range around the mode" and project that price down from the highest point of the mode. That is your first target. The next possible target is 2x the range around the mode, projected down. Add that to your chart.
Tim West, March 18, 2021 8:25AM EST
