Oil prices continued to slide on Tuesday.
The daily oil cycle peaked on day 46. Oil then went on to print its lowest point on day 52, which is late in the timing band for a daily cycle low. So when oil closed above the upper daily cycle band following the day 52 day low, in real time it looked like day 52 hosted the daily cycle low.
Oil broke below the day 52 low on 6/27, which indicates a failed daily cycle. But there is the possibility that the BREXIT extended the daily cycle low out to 6/27. Since a cycle cannot fail then go on to print a new daily cycle high, a break above 50.54 signals the BREXIT extended the daily cycle out to 6/27.
While we still do not have clarity, the over 5% drop in oil on Tuesday makes it more likely that Tuesday was day 11 of a failed daily cycle. A break below the 6/27 low of 45.83 would confirm that day 52 hosted the daily cycle low and that oil is now in a failed daily cycle. And since oil’s daily cycle can run 30 to 50 days, oil could trend lower for another 4 to 8 weeks before printing its daily cycle low.
And the failed daily cycle scenario aligns with what is developing on the weekly charts.
The intermediate oil cycle peaked on week 17 and has since been range bound. This is week 21 for the intermediate oil cycle. Allowing another 4 to 8 weeks for the completion of the current daily cycle takes the intermediate cycle out to weeks 25 – 29, which is right in the timing band for an intermediate cycle low.