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After Sell-off, Crude Oil Poised for Short Covering, but Needs to Close Gap Lower 12/21/20


On a macro basis:On 4/29 we left a bullish reversal below that warned of renewed strength for days—we have seen $34.45 from that open at $14.98 in the (M).On 5/5 we left a medium-term bullish reversal below.We have seen $26.35 from $23.08. We may be in a macro correction against the move down from $114.83 in May of 2011.If so, areas of possible exhaustion come in at $49.26, $57.96-$60.66 and higher.We basically held the upper bounds of the lower of these with a $49.43 high and have rolled over $3.18. Keeping in mind the macro bull call from Unleaded Gas, these may act as temporary resistance on the way up if we trend through them.


On a short-term basis: We held exhaustion below with a $34.04 low and rallied $15.39. On 11/3 we left a short-term bullish reversal below that warned of strength for days.We have seen $11.17 of this so far.On 11/16 we left a short-term bullish reversal below.We have seen $7.37.The decent trade above $45.21 (-1 tic per/hour) warned of renewed strength—we have seen $4.22 of this so far.The decent trade below $47.13 (+1 tic per/hour) temporarily put the bull calls on hold, but we failed to see the $2.50 (+) we were looking for below and the decent trade back above now warns of renewed strength.This will come in at $47.18 (+1 tic per/hour starting at 9:00am). We need to close the gap lower on the day, otherwise we will leave a short term bearish reversal above that will be at odds with the short covering bias.


NOTE: this is just a small portion of the market calls I provide my clients twice daily in the Crude and Energy/Gold complex. 'Decent penetrations' are specific amounts provided to clients daily as well. If you are interested, please feel free to reach out.

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