Crude Oil Sell-Off Continues – Here’s How We’re Trading It. Strategies for Day Trading and Swing Trading The Move.
The current oil sell-off may last some time. The US – China trade war may continue for months or more putting pressure on the price of oil due to global slowdown demand perceptions.
‘At the edge of a cliff’: Oil prices could plummet to US$40 if U.S.-China trade war drags down global economy
Just the collapse of trade growth has shorn 500,000 bpd out of oil demand https://business.financialpost.com/commodities/at-the-edge-of-a-cliff-oil-prices-could-plummet-to-us40-if-u-s-china-trade-war-drags-down-global-economy
The objective of this report is to identify the areas of support on the oil charting so that our traders / clients can execute trades for possible areas for a bounce.
This will also serve as important areas of support that short selling crude oil traders will want to consider for covering all or some of their positions.
The technical indicators below (charting and time cycles) will provide signals for day trade and swing trade oil traders.
As of last Thursday, after the Fed decision to lower rates a quarter point and after Trumps tweet about China the order flow has been considerably negative and the price of oil reflects this.
Dow plunges 760 points in worst day of 2019 as trade war intensifies https://www.cnbc.com/2019/08/05/us-futures-amid-trade-turmoil-between-beijing-and-washington.html
However, there are near term support areas in the charting coming soon so these areas may provide some relief bounces in price. Below we look at the crude oil charting on different time frames.
Both conventional and algorithmic chart models are provided below.
The focus in this report is toward “Keep it Simple Charting (KISS)” to visualize the range of trade which can make it easier to focus on general areas of support and resistance to watch.
For more detailed charting refer to recent premium member reporting and / or charting sent directly to our members via email and / posted in Discord or in oil trading room.
To simplify your trading take your trade positions only at key support or resistance decision areas on whichever time-frame is most appropriate to your requirements. When a trader is struggling, this is one method to correct course and get trading green again. This is also a great method of getting correct positioning / bias in significant sell-offs and bull runs.
Focus on the simple trading ranges first – the channels, the trend lines etc on various time frames on the simplified charts, then move to the algorithmic models to refine trade entries. Then consider time cycles, time of day, volume, recent trade action, technical indicators such as MACD and moving averages, fundamentals, news flow and more.
When you have the macro view in place, the technical algorithmic view then you can use your trading process for your entries. A refined trading process (an edge) is critical.
Keep it Simple (KISS) monthly oil chart says range 47 – 70 with 58 area pivot, 57.76 near resistance and 51.83 near support to watch. Trading 53.65 intra-day.
Also of note on the monthly time-frame is that the MACD is pinching / turning down and the squeeze momentum indicator is trending red.
The Keep it Simple Weekly Crude Oil Chart – Price at 200 MA, MACD turned down, trend lines to watch.
While I am compiling this report price is testing the 200 MA support on the weekly crude oil chart, you can consider this area a prime consideration for a bounce near term. Moving averages are not precise indicators for support and resistance but do provide for near term trade bias. The MACD is turned down on the weekly which favors the bears considerably on this time-frame.
On the simple Daily crude oil chart price is testing key trend line support areas intra day. Watch close here for a bounce.
The MACD is also turned down on the daily time-frame, and I wouldn’t expect an extended rally in crude oil due to the trade war, but a considerable bounce could happen here.
Oil did sell off in to the lower part of the 60 minute chart quad (time cycle) and should bounce to 55.00 area at minimum.
We were talking about this scenario possibly playing out in the oil trading room, and sure enough price sold off right in to that time cycle peak on the 60 minute chart model and is now bouncing on the other side of the time cycle.
The next time cycle low possible in VIX (see VIX report) is in to September 9 – 16 with a recent peak being August 5 (a week prior and after allowed for large time cycle). This implies that oil may bounce in to this time-frame and then begin its next leg down thereafter and in to the Oct 21, 2019 VIX time cycle peak. It is important however to keep top of mind that time cycles can work totally the opposite. The implied peak could be the bottom and the opposite is true, so be cautious with trajectory of trade to determine bias. https://www.tradingview.com/chart/VIX/6pKtcjcR-Volatility-VIX-swing-trade-strategy-is-to-wait-until-between-S/
The link to the most recent 1 minute oil trading model for daytrading sniping precision https://www.tradingview.com/chart/USOIL/RDDX0la5-1/
The link to the most recent 5 minute oil trading model for daytrading and intra day time cycles https://www.tradingview.com/chart/USOIL/HNP8d3Rq-5/
The link to the most recent 30 minute EPIC oil algorithm chart model.
Key support and resistance at quads, channels, mid channels and mid quads. Key areas of consideration intra-day. https://www.tradingview.com/chart/USOIL/ztAfe3gL-temp-epic-in-advance-of-report/
Many other charts are available on recent reports, sent to members on email, posted in discord chat room, in oil trading room and on alert feeds.
Be sure to watch our trade alerts on our alert feeds and in live trading room.
If you need some trade coaching go to our website and register for a minimum 3 hours.
Email me as needed firstname.lastname@example.org.
NYMEX WTI Light Sweet Crude Oil futures (ticker symbol CL), the world’s most liquid and actively traded crude oil contract, is the most efficient way to trade today’s global oil markets. https://www.cmegroup.com/trading/why-futures/welcome-to-nymex-wti-light-sweet-crude-oil-futures.html
Learning to Trade Crude Oil is Like No Other. At this link you will find select articles from our oil traders real life day-to-day experience in our oil trading room. Crude Oil Trading Academy : Learn to Trade Oil
Hedge Funds Turn Their Back On Oil https://oilprice.com/Energy/Crude-Oil/Hedge-Funds-Turn-Their-Back-On-Oil.html?utm_source=tw&utm_medium=tw_repost
— EPIC Crude Oil Algorithm (@EPICtheAlgo) August 6, 2019
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Article Topics; crude oil, trading, strategies, daytrading, swingtrading, $CL_F, $USOIL, $WTI, $USO, CL