There could soon be falling prices coming to the crude oil market. Here’s why…
Our research team has identified a potential major price rotation setup in Crude Oil that may be one of the biggest opportunities for traders in a long while. Traders need to be aware of this potential move because it could coincide with other news related to foreign markets/economies as well as supply/demand issues throughout the rest of this year.
Demand for Oil is tied to the economic activities throughout much of the globe. When demand for Oil is high, one can perceive the global economy to be performing well and consumer demand for oil-based products rather high. When demand for oil subsidies, it is usually due to economic constraints as a result of slower consumer and industrial demand. The only time demand for oil typically skyrockets are when massive supply disruption takes place or war breaks out.
Current price rotation to the upside has reached and stalled near an upper price channel and coincides with our Tesla Vibrational Theory price arcs. We believe this could be setting up for a big downside price move in the near future. Our interpretation of this setup is that Oil will quickly find pricing pressures near the $74-$75 level and begin to move lower.
Before we continue much further, let’s take a look at some statistical data for the Month of July with Crude Oil.
Over 36 total months of scanned data (data going all the way back to 1983) we can determine the following :
** All data related only to the month of July **
Total price activity over those 36 total months:-$5.28
Total Monthly Positive Results = $49.78 spanning 24 total months – Averaging $2.07
Total Monthly Negative Results = -$55.06 spanning 12 total months – Averaging -$4.59
Largest Positive Month = +$8.47
Largest Negative Month = -$15.92
This data tells us that July is more often resulting in a positive price move (by a 2:1 ratio), yet the upside totals do not out perform the downside moves. The downside price moves for July total nearly 10% more than the total upside price moves and equates to exactly half the number of instances (12 vs. 24).
This data suggests to us that any potential downside move in Crude could be well in excess of -$4.00 and could be as large as -$10.00 or more. If our analysis is correct that Crude could rotate much lower based on our price channels and Tesla theory setup, we could be in for a move to below $64.00 ppb here soon if price confirms a breakdown on a close below $72.
This Daily Crude Oil chart shows the wedge formation and our Tesla price vibrational arcs that we believe are set up for a potential downside price rotation move. Obviously, we can see that Oil has rotated within this channel at least twice before – which is why we believe this current downside rotation could have a high probability of happening. Additionally, our predictive modeling system is suggesting price weakness this week in Crude Oil.
This Weekly Crude Oil Chart below shows the same pattern over a longer span of time. Our belief that the $64.00 support level (shown as a horizontal CYAN support line) will be retested over the next 2~5+ weeks if this projected price rotation plays out could mean that if the $64.00 level is breached, we could see Oil fall to well below $60.00 ppb headed into the end of this year.
Consider this fact of data for a minute as we consider this possible price rotation. Since 1983, using quarterly price data, the Q4 historical data show us the following:
Total Q4 Price Move: -$80.71 over 36 Q4 data points
Total Positive Q4 Data: +$85.87 over 14 data points – Averaging +$6.13
Total Negative Q4 Data: -$116.58 over 21 data points – Averaging -$7.93
Largest Q4 upside move: +$19.63
Largest Q4 downside move: -$56.04
Downside price action in Crude Oil is nearly 33% more predictable than upside price action in Q4 with the largest price changes reflecting almost +300% greater chance of downside price collapse than upside price rally.
We may be a bit early with our prediction near this upper price channel, but we believe this could be a super trade going into the end of this year. We just have to wait for the move to accelerate and begin to rotate lower.
Have you been following our analysis recently? Did you catch the upside price move in the US equities markets like we have been predicting for the past few months? How about the moves in the metals markets – did you catch those too? Want to learn how a small and very dedicated team of researchers and traders can assist you in developing greater success for your trading and help you stay ahead of these market moves?
Then visit www.TheTechnicalTraders.com to learn how we can help. Our members receive proprietary research, daily video content, detailed trading signals and much more to assist them in finding great trading opportunities and staying ahead of these crazy market moves. Join the Wealth Building Trading Newsletter today to learn how we can help you become more successful.
Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and author of the book: 7 Steps to Win With Logic
Through years of research, trading and helping individual traders around the world. He learned that many traders have great trading ideas, but they lack one thing, they struggle to execute trades in a systematic way for consistent results. Chris helps educate traders with a three-hour video course that can change your trading results for the better.
His mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility.
He has also been on the cover of AmalgaTrader Magazine, and featured in Futures Magazine, Gold-Eagle, Safe Haven,The Street, Kitco, Financial Sense, Dick Davis Investment Digest and dozens of other financial websites.
Disclaimer: This material should not be considered investment advice. Technical Traders Ltd. and its staff are not registered investment advisors. Under no circumstances should any content from websites, articles, videos, seminars, books or emails from Technical Traders Ltd. or its affiliates be used or interpreted as a recommendation to buy or sell any security or commodity contract. Our advice is not tailored to the needs of any subscriber so talk with your investment advisor before making trading decisions. Invest at your own risk. I may or may not have positions in any security mentioned at any time and maybe buy sell or hold said security at any time.