Tuesday 24 November 2009
This will be the last article this holiday-shortened week, so things can
change by Friday. For now, Crude Oil is saying that it is not yet ready
to move. There was an attempted upside rally on Monday, and we
were buyers early in the morning, but price reversed, and the selling
continued into Tuesday, closing down about 150 tics, a drop of 400
from the Monday high.
One can never know what will develop after taking a position. Ours
turned into a loss, using a stop. It is a cost of business, but even after
today's drop, the picture has not changed. Price has come back to the
75.00 area, the original breakout over the August highs, so it is still
normal retesting activity. A retest is usually a safe place to establish a
position. Our recommendation happened to occur on the only day out
of the 28 day trading range where price opened on the low and closed
lower than the open. Price closed higher for the day, leaving room for
a possible rally today, but it did not happen.
Today's activity continues to expand the trading range without incurring
any damage to the integrity of the developing retest trading range on top
of from where the previous trading range under the breakout took place.
All the factors mentioned in previous analysis of Crude Oil remain intact.
What remains, still, is some reason to get long, if price is going to hold in
the scenario we outlined on several occasions. For now, it is lock and
load and see what develops.