July Crude Oil
There appears to be a chink in the structural armor of the crude oil market. When I analyze the 4 hour price chart the most noticeable development to me is the close below the ichimoko cloud. The market has been riding above this since the 4th wave low of 66.85 seen in the early part of this month. Counting from that low I would categorize the advance as an ending diagonal. In theory the market should breakdown rather quickly to the commencement of the pattern. That level is the previously discussed 66.85. The short term momentum indicator is at the low end of the last week and a bounce off the 70.25 level might unfold. I’d expect any rebound to be feeble. Longer term price charts don’t show support until +/-65. Overhead resistance comes in around 71.50. Should we come back to this level I’d be looking to establish a long put position. Strike of interest would be the July 70. At this level the put should be trading around .90. My target price would be +/- 3.00. Please follow along with me in my attempt to stay one step ahead of this and other future contracts.