Blog Post

Crude Oil Newsletter  

  • By Jun Eun
  • •
  • 14 Jan, 2019
  • •

Crude Oil:

Crude oil had a significant correction after reaching near 77.00 to near 42.00. Even talks of cutting production from OPEC and Saudi Arabia looking to go IPO on their sovereign oil funds did not help crude oil at all. Crude oil seems to follow the same direction as the stock market correction. (See chart below from JC Parets). If that statement is true, then most likely crude oil will see more downside pressure ahead. Based on a correction down in global stock markets which has been pressuring our U.S. markets, may lead crude oil lower even still. However, for now we may see a retracement correction back up with renewed talks from OPEC on cutting production and from short covering. On a longer-term basis, look for renewed selling momentum to increase after the retracement especially IF the stock markets starts to head down.

 As you can see from All Start Chart by JC Parets comparison of crude with S&P 500 Index, we may still see pressure to the downside until the stock markets level off. In this case we should still test next two targets of Mini Dow Jones cash near 21,500 then to 19,200, but for now we are seeing a corrective retracement. Major support in crude oil is at near 42.00. On the technical side, you can see that 55 EXPA (Exponential Moving Average) is moving toward crossing below the 200 EXPA. If it crosses over then we are seeing a strong longer-term downside potential. If the support of 42.00 holds, in my opinion, we may see a bounce back up due to short covering. However, I think it's better to be cautious for the downside at this moment.

The information contained in this article is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices
Chart Posted on January 7th, 2019 
From All Star Charts by JC Parets. All Star Charts research platform provides technical analysis commentary across all asset classes to investors worldwide. www.allstarcharts.com
From All Star Charts by JC Parets. All Star Charts research platform provides technical analysis commentary across all asset classes to investors worldwide. www.allstarcharts.com
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED ABOVE. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.
ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.

Crude Oil  - February 2019

By Jun Eun • February 6, 2019

March may become a crucial month, with these couple of key events that will take place.
  • 90 days dead line for imposing a raise in tariffs on $200 Billion in Chinese goods, which will be raised from 10% to 25% will be in March. Chinese economic numbers were bad so this will put pressure on China to make a deal sooner then later. President Trump's poll has been sinking due to government shut down and trade war with China which has been the blame for our possible economic slow-down. Most likely, Trump will focus to get this trade deal done as soon as possible. Keep in mind that China is the biggest consumer of energies. It's our opinion that both China & USA will want some type of agreement soon as possible.
 
  • On the European front, Brexit has been the key focus for last couple of months. United Kingdom is scheduled to leave the European Union at 11:00 PM U.K. time on Friday, 29th March 2019.

There are also talks of OPEC wanting to push up the price of crude so Saudi Arabia can work on launching their Sovereign fund this year. With these dates in mind, it is our opinion that March will be the key time frame to either see a temporary top setting in for correction down or continued strength upside on crude oil.  


Technically, the first resistance target is slightly below the 56.00. If this market closes above the 56.00 target, it may continue to test 57.50 then to 61.50 target. Also, look for 10 & 13 day moving average to cross above the 55 day moving average to see continued strength upside.

As you can also see from All Star Charts from JC Parets that crude oil is in a range bound between 60's to 43's. JC Parets from All Star Charts has noticed "a significant correlations between crude oil & stocks last few years."

(From All Star Charts by JC Parets. All Star Charts research platform provides technical analysis commentary across all asset classes to investors worldwide. www.allstarcharts.com )

The information contained in this article is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices

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