Oil Slipping Lower

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On Wednesday morning, 11/23, we took a look at oil’s daily cycle.

3 oil daily

We noted that if oil forms a swing high & loses the 50 day MA then oil would be forming a left translated daily cycle.

1 oil daily

And that’s what oil did on Friday. Oil formed a daily swing high an lost 50 day MA last Friday which signaled a left translated cycle formation is developing. After backtesting the 50 day MA on Monday oil delivered more bearish follow through on Tuesday by breaking close to 4% lower and losing the 10 day MA in a clear and convincing manner. Going forward, a close below the lower daily cycle band will proved further confirmation that oil has begun its daily cycle decline.

2 oil weekly

Our cyclical expectation is that oil needs to complete its yearly cycle decline. A left translated weekly cycle formation aligns with that expectation. A failed weekly cycle is needed to confirm that the yearly cycle is in decline. With a peak on week 11, the weekly cycle is setting up to form as a left translated cycle. A break below 39.19 forms a failed weekly cycle and will confirm that oil is in a yearly cycle decline.

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