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01/11/20 9:56 AM
CURRENTLY, OUR ANALYTICAL POSITION AS OF THE CLOSE OF Fri. Jan. 10, 2020: The NY Crude Oil Futures closing today at 5904 is immediately trading down about 3.30% for the year from last year's closing of 6106. Up to now, this market is currently trading below last month's closeand it had been weak for the past 4 months and if the market continues to remain beneath the previous month's close of 6106, then it will be in a weak position just yet. This price action here in January is reflecting that this has been still a bearish reactionary trend on the monthly level. As we stand right now, this market has made a new high exceeding the previous month's high reaching thus far 6565 intraday while it is still trading above last month's close of 6106.
Immediately, the market remains bearish on the short-term levels of our indicators while the long-term trend and cyclical strength are neutral.
The historical major high took place back in 2008 and we have then witnessed a bearish subsequent trend for 11 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 126% 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 8653 and it will require a closing above this level to signal a breakout of the upside is unfolding. Nevertheless, our technical support lies at 4533 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 February in NY Crude Oil Futures so be focused. The last cyclical event was a high established back during September 2019. Normally, this implies that the next turning point should be a low. However, to date, this market has already exceeded that previous high established at 6338. This strongly implies we are in a cycle inversion process, which tends to be rather bullish overall. Last month produced a high at 6234 but closed on the positive side and so far, we have exceeded last month's high. We now need to close above 6234 on a monthly basis to imply a further advance to the upside immediately for now.
Some caution is necessary since the last high 6338 was important given we did obtain one sell signal from that event established during September 2019. That high was still lower than the previous high established at 6660 back during April 2019. Critical support still underlies this market at 5122 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 holding and is trading above last month's high. Overall on a broader basis, looking at the monthly level on our models, this market is currently in a rising trend. We see here the trend has been moving up for the past 12 months. The previous low of 4236 made during December 2018 on the Monthly level has held and only a break of 5407 on a closing basis would warn of a technical near-term change in trend. The previous high made during September 2019 on the Monthly level at 6338 has now been exceeded in the recent rally. However, we still remain below key resistance 5993 on a closing basis.
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