WTI Update Morning 16 September 2019
Commentary:
It is obvious that a disruption has occurred in Saudi oil production. This will cause a cascade effect across the technical indicators that can take a few days to be accurately realized. Technically speaking the entire set of indicators this morning jumped from bearish to bullish. This jump, should stabilization occur rapidly will take up to 21 or more to be filtered out of many technical indicators. Why? The prices in this spike will be calculated in for many trade periods from now and create false signals.
Prices have jumped with a high of 9% from Fridays close as of the moment I am writing this. Prices have traded 5x the normal daily range and the EU markets haven't opened yet.
There are other factors to weigh in that have not been announced/accounted for, such as rig counts having gone down the past few months as demand grew less. Oil from the Americas have decreased in production due to a decrease in prices. It would be easy for these taps to be turned back on and an increase in sales then would adjust the prices. Also the response of the remaining oil production nations to this disruption could stabilize the price after the a few days.
So, I advise caution when trading this news situation.
As a technical trader, I have no idea of the closed door discussions going on currently to counter-act this current situation. If any at all are occurring. So, I am going to position myself at this time as Neutral until I have a technical idea of what exactly is going on with the prices.
That being said.
Weekly oil is still In Consolidation between 50.55 - 60.89 (Price at this moment is 60.11). That consolidation may/may not be broken today to the high. Also, obvious the daily consolidation is broken to the high.
Trade with caution. Be safe, place stop losses and take profit conservatively if you are trading this event.
-PriceProfit
It is obvious that a disruption has occurred in Saudi oil production. This will cause a cascade effect across the technical indicators that can take a few days to be accurately realized. Technically speaking the entire set of indicators this morning jumped from bearish to bullish. This jump, should stabilization occur rapidly will take up to 21 or more to be filtered out of many technical indicators. Why? The prices in this spike will be calculated in for many trade periods from now and create false signals.
Prices have jumped with a high of 9% from Fridays close as of the moment I am writing this. Prices have traded 5x the normal daily range and the EU markets haven't opened yet.
There are other factors to weigh in that have not been announced/accounted for, such as rig counts having gone down the past few months as demand grew less. Oil from the Americas have decreased in production due to a decrease in prices. It would be easy for these taps to be turned back on and an increase in sales then would adjust the prices. Also the response of the remaining oil production nations to this disruption could stabilize the price after the a few days.
So, I advise caution when trading this news situation.
As a technical trader, I have no idea of the closed door discussions going on currently to counter-act this current situation. If any at all are occurring. So, I am going to position myself at this time as Neutral until I have a technical idea of what exactly is going on with the prices.
That being said.
Weekly oil is still In Consolidation between 50.55 - 60.89 (Price at this moment is 60.11). That consolidation may/may not be broken today to the high. Also, obvious the daily consolidation is broken to the high.
Trade with caution. Be safe, place stop losses and take profit conservatively if you are trading this event.
-PriceProfit
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