Oil weekly chart is moving closer to the low around 55. We entered a weekly 11 count, hence at least one weaker weekly close is required. That is although the daily chart produced a daily Combo 13 yesterday and a SEQ 13 today. The weekly chart overrules the counts and the daily XOI confirms with a daily SEQ 10 that the oil-complex needs still to come down a bit. I really wonder where the demand supply market has disappeared to suddenly as some tried to give the 150 level a sense - has $100 demand
vanished?!
Well, in any case, as Russia is back in a (not yet deep) crisis and many of the hyped Arabian we-can-buy-the-world projects are on hold - a short covering rally will start soon in 1-2 weeks once the bottom is set. The magnitude is likely a 38% retracement of the 95 decline gives a 35 magnitude back up to 90 levels probably. In order to see the full scale recovery, we need the dollar to make a high to support a bigger oil upside move. That is still in progress but rather may come early next year, as the liquidation will be lasting up to that point anyway.
Tuesday, November 11, 2008
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