Next week, we’ll be celebrating the six-month anniversary of the September Crude Oil bottom at $32.85. This will come in on July 20. This week, we want to take a more detailed look at the trading action in terms of both price and time.
(Click to enlarge)
Technically, the main trend is up according to the weekly swing chart. At this time, the trend is in no danger of turning down according to the swing chart. However, momentum has been to the downside since the week-ending June 10.
From January 20 to the week-ending July 15, the market has made two major up swings and two major down swings.
The first rally was from January 20 to March 18. This move lasted 41 trading days or 8 weeks. This was followed by a break from March 18 to April 5, or 11 market days or 3 weeks.
The second rally was from April 5 to June 9. This move lasted 46 trading days or 9 weeks. The current downswing started on June 9. At this week’s end it will have been in place for 25 market days or 5 weeks.
This information tells us that the market is in a weak position. The two rallies essentially balanced each other out, with 8 and 9 weeks respectively. I know the chart pattern is supposed to take into consideration all possible factors influencing price, however, we probably would’ve balanced each rally at 8 weeks if not for the Canadian wildfires and the Nigerian terrorist attacks – two extraordinary events.
Crude oil is in a weak…