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06/08/19 8:27 AM
THE ANALYSIS PER THE CLOSE OF Fri. Jun. 7, 2019: NY Crude Oil Futures closed today at 5399 and is trading up about 18% for the year from last year's closing of 4541. As of now, this market has been declining for 2 months. This price action here in June is warning that we may have at least a temporary high in place beginning perhaps a bearish reactionary move on the monthly level if we see lower prices next month or close lower. Otherwise, there remains the potential for a one-month Knee-Jerk reaction low. As we stand right now, this market has made a new low breaking under the previous month's low dropping to 5060 intraday yet it remains trading back above that previous low of 5350 implying near-term strength.
As of now, the market remains while the long-term trend and cyclical strength are bearish.
The historical major high took place back in 2008 and we have then witnessed a bearish subsequent trend for 10 years. The correction since that high has been a 17% decline with the next general key area to watch would be 10102 and a closing beneath that would technically imply a more correction process unfolding on a bit more sustain basis near-term. There was a subsequent correction low that formed during 2016 and we have bounced some 107% which has been a very strong rally to date. We have elected both long-term yearly buy signals during this bounce currently which suggests that a pause in the decline was warranted.
Meanwhile, our technical resistance stands at 8171 and it will require a closing above this level to signal a breakout of the upside is unfolding. Nevertheless, our technical support lies at 4051 which is still holding at this time. At this moment, the market remains between these two projections leaving it neutral on a technical basis.
A possible change in trend appears due come August in NY Crude Oil Futures so be focused. The last cyclical event was a low established back during May. Normally, this implies that the next turning point should be a reaction high. However, thus far, this market has already broken that previous low established at 5305. This strongly implies we are in a cycle inversion process, which tends to be rather bearish overall. Last month produced a low at 5305 but closed on the weak side and so far, we have broken beneath last month's low 5305 closing yesterday at 5399. We now need to close below 5305 on a monthly basis to imply a continued decline is possible.
Some caution is necessary since the last high 6660 was important given we did obtain two sell signals from that event established during April. That high was still lower than the previous high established at 7690 back during October 2018. Critical support still underlies this market at 4810 and a break of that level on a monthly closing basis would warn of a further decline ahead becomes possible. Nevertheless, at this time, the market is still weak trading beneath last month's low. Taking a broader view, this market is in a downward trend on all our indicators looking at the monthly level. We can see this market has been down for the past month. The previous high made during April on the Monthly level at 6660 remains significant technically and only exceeding that level on a closing basis would suggest a reversal in the immediate trend. The previous low of 4236 made during December 2018 on the Monthly level. However, we still remain above key support 4435 on a closing basis.
