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03/07/20 11:41 AM
OUR ANALYTICAL VIEWPOINT AS OF THE CLOSE OF Fri. Mar. 6, 2020: NY Crude Oil Futures closed below our indicating ranges on the Daily level. The market closing today at 4128 is immediately trading down about 32% for the year from last year's closing of 6106. Presently, this market has been declining for 2 months and if the market continues to remain beneath the previous month's low of 4385 on a closing basis, then it will remain weak for now. This price action here in March 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 4105 intraday and remains trading beneath that level.
ECM COMMENTARY
The last ECM target date was Sun. Mar. 13, 2022, which was-737 days ago. This at least warns we need to pay attention to at least this sector coming into a possible alignment and shift in trend with theis trurning point in the ECM.
FOCUSING ON TREND
At present, the market remains quite bearish below all our system support indicators with resistance starting at 4588. The broader cyclical system indicators are also in a bearish position 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 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 58% which has been a respectable advance 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 the market is now trading beneath illustrating technical weakness.
Our timing models warn that a turning point is due come April in NY Crude Oil Futures so we should remain focused. The last cyclical event was a high established back during January. Normally, this implies that the next turning point should be a low. However, the market has been neutral for right now, so caution is advisable. Watch the short-term trading levels for a hint of the next directional move into that target time frame. Last month produced a low at 4385 but closed on the weak side and so far, we have broken beneath last month's low 4385 closing yesterday at 4128. We now need to close below 4385 on a monthly basis to imply a continued decline is possible.
Some caution is necessary since the last high 6565 was important given we did obtain three sell signals from that event established during January. That high was still lower than the previous high established at 6660 back during April 2019. 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 January on the Monthly level at 6565 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, has now been broken in the recent decline here during February and the market is trading beneath it thereby inferring weakness. However, we still remain below key support and key resistance now stands at 5099 above the market.
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