Monday, August 31, 2009

Has Crude Oil Broken Its Uptrend?



Today crude oil was down a little over 4% closing below a 2 month rising trendline. The question that remains is whether or not the uptrend has been broken. If you look at a seasonal chart of crude oil (lower chart) you will quickly notice that the 4th most bullish month of the year for oil is the month of September. I'd be very cautious about shorting this market with the month of September beginning tomorrow.

Rather than use the trendline as a means of determining if the uptrend has been broken, I would prefer to use the last swing low as a critical point to watch. The last swing low was made 2 weeks ago at the 35 level. A move below that low will add weight to the bear point of view but until I see that happen, I will have to say the uptrend is still intact.

5 comments:

Anonymous said...

Thanks for the comments on oil , I have been waiting for something to read from you .

Best regards

Anonymous said...

Hmmm. I think this year and next cannot be compared to many prior years because deflation is kicking in and that is a very rare event indeed.

Doesn't your chart look like a head and shoulders which might be breaking the neckline?

I always enjoy your work.
DaveT

Monty said...

Interesting text & analysis. You have a nice blog. Keep it up!

Yevgeny K. said...

Kevin,

I've been learning a lot from your posts, I see them as very practical and useful tools for trading.
The seasonal chart is very interesting idea, where did you get this chart?

Thanks again.

Anonymous said...

Lately CL has been tracking the SP500...and that has now entered a seasonally week month....

which one will it be? :-)

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