United States Oil (USO) stocks up a second straight week; trade tensions persist
Oil prices on Wednesday logged the lowest finish since January as U.S. crude supplies climbed a second week in a row and concerns about energy demand persisted on the back of growing U.S.-China trade tensions.
“The dominant trend remains bearish as U.S. oil supply is up more than 10% this year, and climbing, while the trade war is still a significant headwind for oil as demand expectations are negatively affected,” Tyler Richey, co-editor of Sevens Report Research, told MarketWatch.
West Texas Intermediate crude for July delivery CLN19, +0.27% fell $2.13, or 4%, to settle at $51.14 a barrel on the New York Mercantile Exchange. That was the lowest front-month contract finish since Jan. 14, according to Dow Jones Market Data. August Brent crude BRNQ19, +0.18% lost $2.32, or 3.7%, to $59.97 a barrel on ICE Futures Europe, the lowest front-month finish since Jan. 28. Both benchmarks had ended roughly flat on Tuesday.
The EIA data also showed that gasoline inventories rose by 800,000 barrels, while distillate stockpiles declined by 1 million barrels last week. The S&P Global Platts survey had shown expectations for a supply decrease of 380,000 barrels for gasoline and a climb of 704,000 barrels for distillate stockpiles.
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 12.01.
The projected upper bound is: 11.30.
The projected lower bound is: 9.89.
The projected closing price is: 10.60.
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 23 white candles and 26 black candles for a net of 3 black candles.
A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 5 falling windows in the last 50 candles–this makes the current falling window even more bearish. The two candles preceding the falling window were black, which makes this pattern even more bearish.
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 50.8264. This is not an overbought or oversold reading. The last signal was a buy 4 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 27.95. 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 buy 4 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 -96. This is not a topping or bottoming area. The last signal was a buy 3 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 13 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed down -0.470 at 10.640. Volume was 54% above average (neutral) and Bollinger Bands were 161% wider than normal.
Open High Low Close Volume___
10.880 10.900 10.570 10.640 35,061,180
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 11.09 12.66 12.54
Volatility: 52 37 39
Volume: 30,224,446 24,808,476 25,915,826
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 gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
UNTD ST OIL FUND is currently 15.2% below its 200-period moving average and is in an downward trend. Volatility is high 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 bearish on USO and have had this outlook for the last 27 periods. Our momentum oscillator is currently indicating that USO is currently in an oversold condition. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.
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