Crude Oil Futures saw a high (~$123.00) on June 14, 2022, and have been retreating ever since. I am not in the fashion of calling bottoms, but there has been some nice consolidation over the past 2 weeks! July 14th saw a recent low (~$90.50), and we have not tested that area yet! Here is what the charts are telling me:
The downtrend line from that June 14 high is currently being tested as I type ($98.75)
If this downtrend line is broken with conviction, the next stop is ~$101.00. This level was SUPPORT (July 7-12).
This ~$101.00 SUPPORT level was broken and became RESISTANCE! CL tried to break this level on July 19, but couldn't do it.
Here is the thing though! After it tested the ~$101.00 level on the 19th, it did NOT make a new low! In fact it stopped at ~$93.00 (Low was ~$90.50)
Uptrends start with higher lows. We traded ~$99.00 yesterday, which coincides with that GIANT down trendline from a month ago. If we break these in the overnight session, ~$101 it is!.
MACD has positive divergence. What does this mean? The MACD made a higher low, as the CME WTI futures traded lower. This basically means the downtrend is slowing down.
Upside targets after ~$101 Are:
~$103.00 (.382 Fibonacci Retracement from ~$123.00 - $~99.50)
~$105.33 (RESISTANCE from July 8)
~$106.86 (50% Fibonacci Retracement )
~110.72 (2 factors here! .618 Fibonacci Retracement AND Resistance from July 4!)
This whole scenario is considered to fail if it breaks the up trendline formed from the low made on July 14, to the next higher low made on July 25 ~$93.00. CME Micro Futures are a great way to enter this positive risk/reward trade.
-Paul Wankmueller CMT
Developed by Gerald Appel in the late 1970’s
Useful in trending markets because it is unbounded
MACD Line = (12 period EMA - 26 period EMA )
Signal Line = 9 period EMA of MACD Line
MACD Histogram = MACD Line - Signal Line
Convergence occurs when the MA move towards each other.
Divergence occurs when the MA move away from each other.
Typically the 26 and 12 period EMA are used
Oscillates above and below 0
When MACD is positive, the shorter average is above the longer term average
Signals when it crosses from below to above the signal line
Histogram was developed by Thomas Aspray in 1986
Signals MACD above or below signal line.
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