United States Oil (USO) production has become a major factor in world supply
During just six months crude oil prices ripped higher by about 20 percent, plunged more than 40 percent and snapped back 25 percent, an intense volatility that analysts warn could be the new normal in the oil market.
December was a real nightmare for the global market, where the swings were $50 at a low, $86 at a high and $68 for the average of Brent crude oil. Brent was trading at about $62.44 per barrel in the futures market Tuesday, while Western Texas Intermediate was $54.25 per barrel.
Booming U.S. oil production and the rise of the United States to become the world’s largest producer has certainly factored in the shift away from OPEC as the main entity controlling supply and prices. In 2016, Saudi Arabia led other OPEC members to align with Russia and other producers to use their combined clout to manage global energy prices.
Another factor new to the market is the active participation of President Donald Trump, who through tweets and comments has pressured both Saudi Arabia and OPEC to let up on production when prices are high. Trump has also moved to sanction two members of OPEC — Iran and Venezuela — impacting global oil supply.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 12.14.
The projected lower bound is: 10.44.
The projected closing price is: 11.29.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 28 white candles and 21 black candles for a net of 7 white candles.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 67.0051. This is not an overbought or oversold reading. The last signal was a sell 1 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 54.80. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 27 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 50. This is not a topping or bottoming area. The last signal was a sell 1 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 buy 24 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed down -0.210 at 11.290. Volume was 30% below average (neutral) and Bollinger Bands were 57% narrower than normal.
Open High Low Close Volume___
11.280 11.473 11.230 11.290 21,945,270
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 11.27 10.72 13.29
Volatility: 32 51 39
Volume: 22,937,312 33,546,368 25,060,488
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 15.1% below its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of USO at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on USO and have had this outlook for the last 19 periods.
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