Has a Top Formed in Crude Oil? Monthly and Weekly View

Jul 6, 2009: 1:38 AM CST

The following charts are taken from my new weekly “Intermarket Technical Report,” which goes into greater detail in discussing the current and potential future price structure for crude oil.  For now, let’s take a look at the Monthly and Weekly timeframe charts to see EMA and Fibonacci confluence resistance overhead.

Crude Oil Monthly Structure

Taking a quick look, we see a dominant Elliott Wave count, which places us either at the final stages of Corrective Wave B up, or the beginning stages possibly of Wave C down which could eventually target the $35 lows over the next few months, particularly if the S&P 500 falls to test its lows.

I wanted to highlight the confluence levels (click for larger chart) about the $70 to $75 level.

First, we see the 50 week EMA at $70.14 and the 20 week EMA at $72.11.  With the scale so large, this $2.00 zone would be considered an EMA confluence zone to watch – we’ll split the difference and call $71.00 as significant resistance.

Just above that is the 38.2% Fibonacci retracement from the closing high to the recent 2009 lows.  This retracement price comes in at $75.50.

Let’s see what the weekly structure shows.

Crude Oil Weekly Structure

We now see the 200 week SMA residing at $74.80, which is serving as well as resistance.

Price is currently supporting on the 50 week EMA at $66.88, so watch closely if this level is broken – a break of $68.00 would almost certainly set up a test of the rising 20 week EMA at $61.00.

Any bearish view would be negated with a close above $75 and especially $80, but for now, there appears to be more confluence overhead resistance than support, so let’s watch the downside risk for now.

For more analysis of Crude Oil (this is just a sample) as well as a multi-timeframe view (Monthly, Weekly, and Daily charts) of the 10-Year Notes, S&P 500, Gold, Crude Oil, and US Dollar Index, please check out my new subscription weekly service “Weekly Intermarket Technical Analysis” (full information and two samples are provided with the link).

I’ve been doing this analysis privately and for mentorship clients, and I’ve made it more formal/informative and am proud to offer it as a new and unique analysis of multi-timeframe structures for key levels to watch and opportunities to trade both for short-term and position traders of key markets.

Corey Rosenbloom, CMT

12 Comments

12 Responses to “Has a Top Formed in Crude Oil? Monthly and Weekly View”

  1. redvetttes Says:

    bought DTO @ 65.00, Hold long,take some cash off the table or take the money and run ?
    Thanks for all the help

  2. dumbpainter Says:

    Can an ABC on crude end at a place where A and C are the same price (ala huge double bottom?)

    I just can't see crude below 28 dollars ever again in the history of the world.

  3. Corey Rosenbloom, CMT Says:

    Then you've got a nice profit already! I don't give individualized trading advice, but if crude falls as the chart indicates it might, then you stand to make further profit – though watch your stops closely on a 2x fund.

  4. Corey Rosenbloom, CMT Says:

    Yes – and that's my thinking with the structure. I have a hard time fundamentally (though not technically) seeing how price hits the $35 level again.

    I got blasted from the fundamental traders (read some of the prior comments on the blog on my various “bullish crude oil” posts) for saying Crude was likely to rise to at least $70 back in January and February (I was right) and now that we're at confluence resistance, the odds favor downside action – but the targets aren't as clear – there was so much confluence at $70. Not so much on the downside.

  5. sdmooks Says:

    Corey,

    Wondering if you're considering alt count,,,from astrocycle.net

    http://img44.imageshack.us/img44/3913/wticm.png

  6. Corey Rosenbloom, CMT Says:

    Then you've got a nice profit already! I don't give individualized trading advice, but if crude falls as the chart indicates it might, then you stand to make further profit – though watch your stops closely on a 2x fund.

  7. Corey Rosenbloom, CMT Says:

    Yes – and that's my thinking with the structure. I have a hard time fundamentally (though not technically) seeing how price hits the $35 level again.

    I got blasted from the fundamental traders (read some of the prior comments on the blog on my various “bullish crude oil” posts) for saying Crude was likely to rise to at least $70 back in January and February (I was right) and now that we're at confluence resistance, the odds favor downside action – but the targets aren't as clear – there was so much confluence at $70. Not so much on the downside.

  8. sdmooks Says:

    Corey,

    Wondering if you're considering alt count,,,from astrocycle.net

    http://img44.imageshack.us/img44/3913/wticm.png

  9. Hewison Asks Just How Low can Crude Oil Go | Afraid to Trade.com Blog Says:

    […] Oil market yesterday which roughly squares with my analysis, particularly in my recent post “Has a Top Formed in Crude Oil?“.  I wanted to show you Adam’s video which uses a couple of extra tools and provides […]

  10. Hewison Asks Just How Low can Crude Oil Go | Penny Stock Trading System Blog Says:

    […] Oil market yesterday which roughly squares with my analysis, particularly in my recent post “Has a Top Formed in Crude Oil?“.  I wanted to show you Adam’s video which uses a couple of extra tools and provides […]

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