United States Oil (USO) trade dispute continuing to cast a shadow over the market

United States Oil (USO) trade dispute continuing to cast a shadow over the market

United States Oil (USO) trade dispute continuing to cast a shadow over the market

Oil prices steadied on Wednesday after falling at the start of the session, with the potential for damage to the global economy and fuel demand from the intensifying Sino-U.S. trade dispute continuing to cast a shadow over the market.

International benchmark Brent crude futures were at $58.97 a barrel by 0221 GMT, up 3 cents, or 0.05%, from their previous settlement and trading near seven-month lows.

Meanwhile West Texas Intermediate (WTI) crude futures were down 8 cents, or 0.15%, from their last close to $53.56 per barrel.

Tensions in the Middle East have heightened in the wake of attacks on tankers and U.S. drones, raising concerns over passing through the Strait of Hormuz, a key shipping artery of global oil trade.

Elsewhere, data indicating a larger-than-expected drop in U.S. crude stocks offered some support to oil prices.

U.S. crude inventories fell by 3.4 million barrels in the week ended Aug.2 to 439.6 million barrels, compared with analyst expectations for a decrease of 2.8 million barrels.

Official data from the government’s Energy Information Administration (EIA) is due later on Wednesday.

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 11.91.

The projected upper bound is: 11.93.

The projected lower bound is: 10.31.

The projected closing price is: 11.12.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 21 white candles and 27 black candles for a net of 6 black candles.

An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.

If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with UNTD ST OIL FUND), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 20.1835. This is not an overbought or oversold reading. The last signal was a sell 3 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 38.09. 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 37 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 -178.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 2 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 3 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed down -0.230 at 11.140. Volume was 13% above average (neutral) and Bollinger Bands were 6% narrower than normal.

Open     High      Low     Close     Volume___
11.430 11.440 11.090 11.140 30,273,908
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 11.61 11.66 11.93
Volatility: 44 44 42
Volume: 31,705,052 29,644,352 28,033,024

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.

Summary

UNTD ST OIL FUND is currently 6.7% 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 4 periods.

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