2 scenarios for the Oil Bulls...

8 เม.ย. 2016

This chart is linked to a smaller time frame analysis I have just posted a few minutes ago. In that analysis I am working under the assumption that we are in Scenario 1 (as illustrated here).

My conclusions are that a buy should be take and stops quickly brought to break even once in good profit. Why?
Case 1 - Don't enter long and we are in scenario 1... miss a great entry for the bull market continuing.
Case 2 - Enter long position but we are actually in scenario 2... if we bring stops to break even as soon as we are slightly in profit but scenario 2 plays out... no loss. But we don't miss risking the bull market in case we're wrong.

The biggest thing to take away from these 2 ideas is that I am bullish on oil... the only question is "Is the bull market ready to resume?"... Personally I think not quite... but I don't want to miss risking it.

Hence here are my 2 possible outcomes illustrated.

Any questions?

8 เม.ย. 2016

การซื้อขายยังคงดำเนินอยู่

Today's action further strengthens my belief that we are about to see scenario 2 play out... largely due to the fact that the rally as labelled C in my scenario 2 illustration is (currently) of equal length or the rally labelled A. This matches an Elliott Wave suggestion and appears to be a nice fit for the analysis.

I'm entering an aggressive short at 39.50 with stops above 39.85 (current high of today's rally) with a view that we will see a decline now below 36.60.

If this happens I will be 90% confident that we are seeing scenario 2 playing out.