Oil printed a bullish reversal on Thursday.
The daily oil cycle peaked on day 15. It printed its lowest point on Thursday, day 25. That places oil in the early part of its timing band for a daily cycle low. A swing low and a close above the declining 10 day MA will signal a new daily cycle.
Oil’s daily cycle has averaged 38 days since the February, 2016 low. So it is early to be looking for a DCL. But there are a few signals on the daily and weekly charts that point to a possible 25 day, DCL. First off, the aforementioned bullish reversal has eased the parameters for forming a swing low. A break above 49.22 forms a daily swing low to signal a new daily cycle. Also the oscillators are beginning to develop bullish divergences, which often accompany cycle lows.
The 50 week MA has acted as support since oil emerged from from is 3 year cycle low. So there is a possibility that oil is back testing the 50 week MA. A close below the 50 week MA indicates that oil is continuing its yearly cycle decline. But if Thursday’s bullish reversal marked the daily cycle low, that would allow oil to close above the 50 week MA for the week, which would allow us to construct a weekly cycle trend line. Oil is in a weekly uptrend. It will continue in its weekly uptrend until it closes below the lower weekly cycle band.