Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective. In other words, in our opinion taking profits off the table and closing the speculative short position is currently justified from the risk to reward point of view.

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Today’s alert is going to be very quick as Nadia Simmons is not able to write the regular issue today due to health concerns and I (Przemyslaw Radomski here) wanted to see how the situation in the crude oil develops during today’s session as it seemed likely that it could big implications for the next few days.

According to finance.yahoo.com, crude oil moved to $64.22 today and that’s very close to the support provided by two Fibonacci retracements: the 38.2% one based on the October 2017 low - May 2018 rally and the 61.8% one based on the February 2018 - May 2018 rally. This, plus the shape of today’s session (bullish reversal) creates a good possibility to see a corrective upswing from here.

Naturally, the crude oil could move even lower, but if you asked us if we would be opening a fresh short position today, if we didn’t have one in place, we would have answered “no”. This means that the current position is no longer justified from the risk to reward point of view and the speculative short position should now be closed and profits taken off the table. As a reminder, the short position was opened before the start of the US session on May 25th, so we’re profiting from about $5 move in just several trading days.

Thank you.

Przemyslaw Radomski, CFA