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Crude oil’s strength has been contained (so far, at least) by our friendly local Fibonacci line whose level is $45.14. The high for this session for crude oil………$45.15. If it holds, cue spooky music. If it’s breached, cue eye-rolling. UPDATE! Cue eye-rolling. We’ve breached the level. It’s no-man’s-land at this point.
Today’s upside reversal action comes on the heels of a bearish Inventory Report, and from a new low in the vicinity of important, intermediate-term support at $38.90, which represents the 50% retracement level of the entire Feb- Aug advance.
In addition, buying interest emerged at the lower-boundary zone of the June-July down-sloping corrective price channel, classic action into downside channel exhaustion.
Of course, Oil must preserve today’s gains, and follow-through to the upside to confirm a significant turn.
The action so far today is very promising technically– and provides preliminary evidence that Oil has completed the correction of its initial, intermediate-term recovery period.
One of my better performers today is Nabors Industries, which I shorted a little over a week ago when it broke its intermediate-term ascending trendline.
I’ve got to tell you, I’m frustrated. You know how bearish I’ve been about crude oil. Day after day, this has been an incredibly consistent market. I would give my left nut for the S&P 500 chart to look anything like this……..the equivalent percentage drop in the Dow 30 would be about 4,100 points, just to give you some perspective. And that’s only since June 9th!
