Could it happen again? The move higher in WTI Crude Oil, a 61% rally off the February 11 low, has been mind numbing. Quarter after quarter, we have seen arguments about why the price of oil will likely not rise, but over the last month what we have seen the price of oil do, is rise. Unfortunately, for Crude Bulls, we have now come to see the biggest test yet for this move higher, the 200-day moving average. If we make a retest for the February low, it will make a wild market look simpler than it really is.
Learn more about the breakdown of oil production – click here.
Another recent development and one that will likely determine boils next large directional move is that of US dollar strength. The price of WTI crude oil is inversely correlated to the US Dollar and the move higher in crude oil has aligned with the price of US Dollar at the lowest levels since October. However, a few Fed speakers this week have put the attention back on US dollar strength as they talk up multiple rate hikes in 2016. Should this come to fruition or fear of fruition pushing the dollar higher, Crude Oil could quickly see its gains evaporate in the same manner of time that they arose.
The 200-DMA Has Been A Formidable Foe For WTI Crude Oil Since July 2014
As of Wednesday, 200-day moving average sits below $42 per barrel at $41.76. Given the fortitude of the moving average, there is little resistance outside of this level that matters for now considering the 61% move higher and the obvious respect that the price has paid to the 200-day moving average in the last year.
Therefore, we should spend our attention and time looking at chart support, which is another story altogether. The levels that catch my attention are the recent corrective low and the 38.2% retracement at $35.94/bbl and the 21-day moving average, currently at $36.90 per barrel. Should these levels hold the support, we could soon see a rise that would test and potentially break the 200-day moving average. While not a price support, it is also helpful to watch the RSI (5) support below the chart, because if we break the trendline drawn on the chart above, it would be a sign that shows momentum is falling again.
Contrarian System Warns of Another Push Higher
In addition to the technical focus around the 200-DMA resistance, we should keep an eye on retail sentiment, which is trying to fight the trend. Another push higher would align with our Speculative Sentiment Index or SSI. Our internal readings of US Oil show an SSI reading at -1.94, as 34% of traders are long. We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are short gives a signal that the US Oil may continue higher. The trading crowd has flipped from net-long to net-short recently within the last month. If the reading were to turn further negative, and the price breaks above the 200-DMA resistance, we might well be on our way back to $50/bbl.
Could it happen again? The move higher in WTI Crude Oil, a 61% rally off the February 11 low, has been mind numbing. Quarter after quarter, we have seen arguments about why the price of oil will likely not rise, but over the last month what we have seen the price of oil do, is rise. Unfortunately, for Crude Bulls, we have now come to see the biggest test yet for this move higher, the 200-day moving average. If we make a retest for the February low, it will make a wild market look simpler than it really is.
Learn more about the breakdown of oil production – click here.
Another recent development and one that will likely determine boils next large directional move is that of US dollar strength. The price of WTI crude oil is inversely correlated to the US Dollar and the move higher in crude oil has aligned with the price of US Dollar at the lowest levels since October. However, a few Fed speakers this week have put the attention back on US dollar strength as they talk up multiple rate hikes in 2016. Should this come to fruition or fear of fruition pushing the dollar higher, Crude Oil could quickly see its gains evaporate in the same manner of time that they arose.
The 200-DMA Has Been A Formidable Foe For WTI Crude Oil Since July 2014
As of Wednesday, 200-day moving average sits below $42 per barrel at $41.76. Given the fortitude of the moving average, there is little resistance outside of this level that matters for now considering the 61% move higher and the obvious respect that the price has paid to the 200-day moving average in the last year.
Therefore, we should spend our attention and time looking at chart support, which is another story altogether. The levels that catch my attention are the recent corrective low and the 38.2% retracement at $35.94/bbl and the 21-day moving average, currently at $36.90 per barrel. Should these levels hold the support, we could soon see a rise that would test and potentially break the 200-day moving average. While not a price support, it is also helpful to watch the RSI (5) support below the chart, because if we break the trendline drawn on the chart above, it would be a sign that shows momentum is falling again.
Contrarian System Warns of Another Push Higher
In addition to the technical focus around the 200-DMA resistance, we should keep an eye on retail sentiment, which is trying to fight the trend. Another push higher would align with our Speculative Sentiment Index or SSI. Our internal readings of US Oil show an SSI reading at -1.94, as 34% of traders are long. We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are short gives a signal that the US Oil may continue higher. The trading crowd has flipped from net-long to net-short recently within the last month. If the reading were to turn further negative, and the price breaks above the 200-DMA resistance, we might well be on our way back to $50/bbl.
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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