United States Oil (USO) expectations for weaker-than-anticipated global economic growth
Oil prices fell on Tuesday, briefly entering a bear market, after the United States took measures to allow some of Iran’s biggest customers to continue importing its oil without violating U.S. sanctions against the Islamic Republic.
The sanctions waivers have further eased concerns that the oil market will swing into a deficit of crude supplies. Expectations for weaker-than-anticipated global economic growth amid a continuing U.S.-China trade dispute and currency weakness in emerging markets is also raising questions about demand for oil.
U.S. West Texas Intermediate crude ended Tuesday’s session down 89 cents, or 1.4 percent, to $62.21 a barrel. At the session low, WTI touched $61.31, falling more than 20 percent from last month’s nearly four-year high level of $76.90.
The Trump administration on Monday reinstated sanctions on Iran’s energy, banking and shipping industries, marking the end of a 180-day grace period the United States set for oil buyers to wind down imports from Iran.
However, Washington granted temporary waivers to eight countries, including China and India, the biggest purchasers of Iran’s oil. The other countries allowed to continue importing Iranian crude for the time being are Greece, Italy, South Korea, Taiwan and Turkey.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 14.39.
The projected upper bound is: 13.83.
The projected lower bound is: 12.48.
The projected closing price is: 13.15.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 20 white candles and 27 black candles for a net of 7 black candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 8.1947. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 7 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 25.82. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 23 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -143.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 7 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 19 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed down -0.120 at 13.180. Volume was 42% above average (neutral) and Bollinger Bands were 57% wider than normal.
Open High Low Close Volume___
13.390 13.420 12.992 13.180 29,603,260
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 13.78 14.73 13.83
Volatility: 21 29 30
Volume: 25,110,232 20,633,078 20,869,790
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
UNTD ST OIL FUND is currently 4.7% below its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of USO (mildly bearish). Our trend forecasting oscillators are currently bearish on USO and have had this outlook for the last 15 periods. Our momentum oscillator is currently indicating that USO is currently in an oversold condition.