Oil About to Confirm New Uptrend

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After emerging form its yearly cycle low in June, oil tested and was rejected by the 50 day MA. But oil recovered and then continued to rally, peaking on day 27. Then oil began its daily cycle decline, printing its lowest point on Thursday, day 39.

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At day 39, that placed oil in its timing band to print a daily cycle low. Oil formed a swing low on Friday off of support from the 50 day MA to signal a new daily cycle.

Oil had began to close above the upper daily cycle band prior to declining into its 39 day DCL to establish a daily uptrend. Oil managed to close above the lower daily cycle band as it printed its DCL on Thursday. Once oil closes back above the upper daily cycle band that will confirm the new daily uptrend. Oil will then remain in its daily uptrend until it closes below the lower daily cycle band.

Possible Daily Cycle Low for Oil

Oil printed a bullish reversal on Tuesday.

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The daily oil cycle peaked on day 27. Oil did not form a daily swing high until Friday, day 35. Oil finally broke below the daily cycle trend line on Monday to confirm the daily cycle decline. Oil printed it lowest point on Tuesday. At 37 days, that places oil well within its timing band for a daily cycle low. Tuesday’s bullish reversal also eases the parameters for forming a swing low. A break above 47.92 forms a swing low. Then a close above the 10 day MA will signal a new daily cycle.

Oil had been closing above the upper daily cycle band prior to entering its daily cycle decline, which indicates that oil is in a daily uptrend. If oil forms a daily cycle low above the lower daily cycle band then oil will remain in its daily uptrend.

Daily Cycle Low

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Stocks formed a swing low on Monday.

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Stocks printed their lowest point on Thursday, day 29. After a narrow range day on Friday stocks rallied enough on Monday to recover all of Thursday’s drop. That and the fact that stocks also formed a daily swing low convinces me that the daily cycle low has been set. A close back above the upper daily cycle band will confirm the new daily cycle.

Oil confirmed its daily cycle decline on Monday.

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The daily oil cycle peaked on day 27. It did not manage to form a daily swing high until Friday, day 35. Oil broke below the daily cycle trend line on Monday to confirm that oil is in its daily cycle decline. Monday was day 36, placing oil in its timing band for a daily cycle low. If a swing low forms now, it has good odds of forming the daily cycle low. Oil is currently in a daily uptrend. If the daily cycle low forms above the lower daily cycle band then oil will remain in its daily uptrend.

Energy Bouncing Back

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Back on July 3rd we discussed how there were bullish developments beginning to emerge in the energy sector. Even though XLE managed to print a lower low there continue to be bullish developments that signal the low is nigh.

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XLE breached the declining 50 day MA on day 8. However XLE proceeded to break lower to undercut the day 33 low only to form a bullish reversal on Friday. XLE has since formed a swing low and delivered bullish follow through which signals that Friday hosted either a shortened 11 day, DCL or a stretched 44 day DCL. The bullish divergences on the oscillators align with a DCL printing on Friday. At this point we need to see a clear and convincing break above the declining 50 day MA to confirm that the undercut low hosted the daily cycle low.

Natgas also formed an undercut low last week.

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NATGAS broke below the previous DCL last Wednesday. In real time this looked as if Natgas formed a failed daily cycle. But Tuesday’s rally makes it look like last Wednesday hosted an undercut low and extended the daily cycle out to day 54. A clear and convincing close above the declining trend line will confirm that Natgas is in a new daily cycle.

While oil did not form an undercut low, it did look like it was in trouble last week.

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Oil was soundly rejected by the declining 50 day MA last Wednesday. Coupled that with oil closing below both the 10 day MA and the lower daily cycle band on Friday made it look as if oil was forming left translated daily cycle. However, oil printed a reversal on Monday and then delivered bullish follow through forming a swing low on Tuesday. That allows us to construct a daily cycle trend line. As long as oil remains above the daily cycle trend line then it will continue to develop bullishly.

Energy Looking Bullish

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It looks as if Energy turned a corner.

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We discussed on Sunday how XLE has been caught in the grip of a punishing daily downtrend. On Monday XLE closed above the declining trend line to signal that day 10 hosted an early DCL. Shorten daily cycles are more likely to occur at the tail end of an extended sell off due to exhaustion of bears. And that is what appears to be happening with XLE.

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Another bullish signal occurred with the BPENER. Monday the BPENER delivered bullish follow through to last week’s close above the 50 day MA.

In my Special Energy Update that I posted on Sunday I take look at the energy sector and discuss the weekly charts for NATGAS, Oil, Uranium and XLE as well as the yearly chart for XLE.

Perhaps you would like to integrate cycle analysis into your trading. This week I am offering a special 4th of July Trial Subscription. The trial subscription includes the Special Energy Update as well as 6 weeks of Likesmoney Subscription Services for $15.

The 6 week trial subscription includes:
* The Special Energy Update
* The Weekend Report
* The Mid-Week Update
and I also post what I call my Weekend Updates.
The Weekend Updates cover:
* The FAS Buy/Sell Indicator
* NATGAS
* XLE
* Copper
* GYX
* The Bullish Percentage BINGO

The ideal time to buy is at a cycle low.
* There are 4 cycle lows that I cover:
– The daily cycle low
– The intermediate (weekly) cycle low
– The yearly cycle low
– the multi-year cycle low

My goal is to develop an on-going framework of expectations using cycle analysis.
So please click here for the Special Energy Update & 6 week trial subscription.

Energy Update

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There were some bullish developments in the Energy Sector last week.
After lengthy sell offs NATGAS, Oil, and Uranium all confirmed new daily cycles last week.

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And the Energy Sector Bullish Percent Index closed above the declining 50 day MA.
However there is still a question if XLE has printed its daily cycle low.

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XLE has been caught in the grip of a punishing daily downtrend. But bullish signals are beginning to emerge.

XLE formed a swing low off the 6/21 low and closed above the bearish trend line. Along with the huge TSI bullish divergence indicates that 6/21 hosted an early DCL. I would like to see a close above the declining 50 day MA confirm the new daily cycle.

In my Special Energy Update I will take a closer look at the energy sector. We will look at the weekly charts for NATGAS, Oil, Uranium and XLE as well as the yearly chart for XLE.

Perhaps you would like to integrate cycle analysis into your trading. This week I am offering a special 4th of July Trial Subscription. The trial subscription includes the Special Energy Update as well as 6 weeks of Likesmoney Subscription Services for $15.

The 6 week trial subscription includes:
* The Special Energy Update
* The Weekend Report
* The Mid-Week Update
and I also post what I call my Weekend Updates.
The Weekend Updates cover:
* The FAS Buy/Sell Indicator
* NATGAS
* XLE
* Copper
* GYX
* The Bullish Percentage BINGO

The ideal time to buy is at a cycle low. 
* There are 4 cycle lows that I cover:
– The daily cycle low
– The intermediate (weekly) cycle low
– The yearly cycle low
– the multi-year cycle low

My goal is to develop an on-going framework of expectations using cycle analysis.
So please click here for the Special Energy Update & 6 week trial subscription.

Oil Delivers a Bullish Signal

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Oil formed an inside day on Thursday. This is a bullish signal of an impending daily cycle low.

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Oil printed its lowest point on Wednesday, day 32, which places oil in its timing band to form a daily cycle low. An inside day that forms in the timing band for a daily cycle low has good odds of signaling a new daily cycle. At this point oil needs to form a swing low and break above the declining trend line to confirm a new daily cycle. A break above 44.20 forms a daily swing low.

In the Weekend Report I will discuss that once a daily cycle low forms for oil, that it will likely mark the weekly and yearly cycle lows as well.

Oil Delivers Bearish Surprise

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Oil rallied for over 2 weeks since emerging from the May 5th low. Earlier this week oil began to close above the upper daily cycle band to signal an end to the daily downtrend and that oil may have left behind an intermediate cycle low.

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Oil was getting stretched above the 10 day MA and was due for a cooling off or consolidation. Instead, oil delivered a surprise move lower on Thursday. Generally surprise moves occur in the direction of the trend and Thursday’s 4.79% drop indicates that oil is still in a bearish trend.

Thursday’s move lower eases the parameters for forming a daily swing high. A break below 48.53 forms a daily swing high. If oil forms a daily swing high then it will also threaten closing below the lower daily cycle band. A close below the lower daily cycle band indicates that the intermediate cycle is in decline. You will notice that the previous 2 times that oil closed below the lower daily cycle band that oil ended up forming failed daily cycles.

Oil Daily Cycle Low

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Oil formed a swing low on Monday.

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Oil printed its lowest point on Friday, following the day 15 peak. Friday’s bullish reversal eased the parameters for forming a daily swing low. Since 31 days places oil in its timing band for a daily cycle low, the swing low that formed on Monday signals a new daily cycle. A close above the 10 day MA will confirm the new daily cycle.

So while Friday has good odds of marking the daily cycle low, the question is if Friday also marks the intermediate cycle low. The formation of a weekly swing low would signal a new intermediate cycle. A break above 49.32 would form a weekly swing low.

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But even if oil forms a weekly swing low, oil has not delivered a failed intermediate cycle. Since oil is in its timing band for a YCL, I would like to see a failed weekly cycle to complete the yearly cycle decline. Therefore oil would need one more failed daily cycle in order to form a failed weekly cycle. If that happens that would extend the yearly cycle decline by another 5 to 7 weeks.

But for now, it does look like a daily cycle low has formed. Next, a break above 49.32 would form a weekly swing low. Then if oil closes above the upper daily cycle band that would swing the odds in favor of this being a new intermediate cycle.

Scouting for a Long Crude Entry

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Oil broke below the previous daily cycle low on Thursday to form a failed daily cycle and to signal a continuation of its yearly cycle decline.

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May is month 15 for the yearly oil cycle, which places oil in its timing band for its yearly cycle low. Oil should break below the previous intermediate cycle low in order to complete its yearly cycle decline.

However, oil has not yet produced a failed weekly cycle.

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Oil broke below the week 18 on Wednesday to signal a continuation of its weekly cycle decline. With a peak on week 7, oil has locked in a left translated weekly cycle formation. A break below 42.20 forms a failed weekly cycle. Once that happens oil should complete its yearly cycle decline and then we can hunt for a long entry on crude.