Trading position (short-term; our opinion): Short positions with a stop-loss order at $65.23 are justified from the risk/reward perspective.

Crude oil declined significantly on Tuesday, but it didn’t continue do slide on Wednesday - we saw a rebound on relatively small volume. Is it time to get back on the long side of the market?

Today’s alert is once again going to be very brief, as the situation is developing precisely in tune with our expectations. Yesterday’s small corrective upswing on relatively small volume is nothing bullish - that’s exactly how a pause or small correction should look like - low volume serves as a confirmation.

In yesterday’s alert we wrote the following:

“The crude oil price could pause here or very soon (as it’s right after a sharp daily downswing), but we don’t think that this action will be anything more than a pause. Consequently, we think that the (profitable) short position that we described previously should be kept intact - we think it’s a good idea to let the profits grow and to endure the possible small correction.

We’ll have much more to say in Tuesday’s alert and that’s exactly what we plan to do. It’s scheduled for Tuesday as Monday is the Memorial Day, but we might be able to post it earlier (we can’t promise that, though).”

The above remains up-to-date - we have just seen the above-mentioned pause. Again - there is not much to say today and it doesn’t seem very likely that there would be much to say tomorrow either. The stop-loss levels from yesterday’s alert remain up-to-date.

As we wrote yesterday, there will be no alert tomorrow due to your Editor’s travel plans - thank you for understanding. We’ll have much more to say in Tuesday’s alert and that’s exactly what we plan to do. It’s scheduled for Tuesday as Monday is the Memorial Day, but we might be able to post it earlier (we can’t promise that, though).

Very short-term outlook: bearish
Short-term outlook: bearish
MT outlook: mixed with bearish bias
LT outlook: mixed with bearish bias

Trading position (short-term; our opinion): Short positions with a stop-loss order at $65.23 are justified from the risk/reward perspective. We will keep you – our subscribers – informed should anything change.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief

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