Going Back to 2002, Twelve of last Thirteen Major Time Cycle completions on Weekly Oil Chart (a significant structure) have a Trend Reversal to one extent or another.
This structural set-up should not be ignored by oil traders as the weekly chart is a significant structural consideration for long / short bias in trade planning and positioning.
Consideration toward indicators or chart set-ups / patterns in your oil trade planning is good (technical), as is fundamental research.
However, relying on limited individual charting indicators or set-up patterns (such as moving averages, MACD, head and shoulder pattern, etc) to form a bias can be problematic as it doesn’t provide a complete “structural” perspective to effectively form trade bias / positioning.
In our work, we rely heavily on chart structure on various time frames (1 min, 3, 5, 15, 30, 1 hour, 2, 4, Daily, Weekly and Monthly).
Above all else, the structure of the trading instrument (in our work and trade) is trump consideration. We know that all financial instruments have a structure and it is this structure that allows our trade positioning and our machine coding to operate at a significant advantage to the broad market.
If you wish to confirm our call record, contact me anytime for a personal tour of time stamped alert feeds, private user feeds and more.
January 2019 Update:
It happened again… today I posted an updated chart that brings the count to 13 out of last 14 time cycles, see below.
Dating back to 2002, 13 of 14 major time cycles on weekly crude oil chart structure seen trend reversal to some extent or another #Oil #OOTT #TimeCycles FX USOIL WTI $CL_F $USO $UWT $DWT
The Technical Significance of the Weekly Oil Chart and Structure Presented:
Specific to the point of this post, below is the oil chart I published to Trading View that shows the time cycle peak areas of oil on the weekly chart. The weekly oil chart is a significant structure because it is one of the broadest time frames the market uses to chart the trade of oil.
Dating back to 2002, 12 of 13 major time cycles on weekly oil chart have seen trend reversal to some extent or another #OILChart
Real-time oil chart link:
How to Read this Oil Chart:
- The vertical green lines show the date(s) of the peak time cycle area. You will notice that oil trade has reversed trend 12 of the last 13 time cycle peak areas. In some instances immediately and in some instances a few weeks later. You will also notice that the trend reversal is at times considerable and at other times not so much. The only time cycle peak that did not see a trend reversal was during the price plunge in October of 2014.
- The yellow arrows on the oil chart denote area of trend reversal (in some instances a simple retrace and in others the reversal in oil trade is much more significant).
- The diagonal blue lines are simple Fibonacci related trendlines that form what we call Trading Quadrants (the term comes from the lab work we do in preparation for machine coding of our algorithm models).
- The horizontal lines are Fibonacci related support and resistance (retracement) lines. Our Fibonacci work is formed specific to chart structure and not conventional Fibonacci retracement work you may usually see from market chartists.
- The red circles are targeted areas of precise trade that we note for our reference and purpose as it relates to our work. Not a significant indication on this chart for the point of this post.
- The moving averages 20 MA, 50, 100, 200 are also on the chart and also not significant to the point of this post.
Below are Oil Chart Snap Shots From 2002 to Present (Note the Symmetry):
Symmetry and patterns in trade are important, especially if symmetry can be established within time cycles with some regularity. The chart images for oil trade from 2002 to 2018 (present) display the importance of this type of work.
Oil Charting Jan 2002 to Jan 2009 shows a consistent pattern / symmetry of oil trade trend reversals at time cycle peaks. $USOIL $WTI $CL_F #OIL
Oil Charting Jan 2008 to December 2014 also shows the trend reversal pattern with one exception in Oct 2014. $USOIL $WTI $CL_F #OIL
Oil Charting from Aug 2013 to present day in May 2018 also displays the trend reversals post time cycle peaks. $USOIL $WTI $CL_F #OIL
Where are We Now?
Oil trade is now on the other side of an important time cycle completion / peak, as with the last thirteen time cycles highlighted in this post.
There is a very high probability of a reversal in trend, whether it be a simple retrace or a completely new trend develops.
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Learning to Trade? Here are some links that reflect topics in this post:
Trend Reversal https://www.investopedia.com/terms/r/reversal.asp
Charting Time Cycles http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:cycle_lines
Fibonacci for Charting https://www.investopedia.com/terms/f/fibonacciretracement.asp
Symmetry in Mathematics https://en.wikipedia.org/wiki/Symmetry_in_mathematics
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