Trading position (short-term; our opinion; levels for crude oil's continuous futures contract): No positions are justified from the risk-reward perspective.

In the previous Oil Trading Alert we wrote that in our view, a breakdown back below the 50% Fibonacci retracement was more likely than a breakout above the 61.8% one. However, we also wrote that we preferred to wait for the market to tell us where it really wants to move by breaking higher or lower, instead of trying to guesstimate it beforehand.

This remains up-to-date also today.

Black gold moved decisively lower today, but it's still above the 50% Fibonacci retracement level, and it's also above the early-March high in terms of the closing prices.

This means that the outlook for the crude oil has just deteriorated, but it's too early to say that the top is definitely in, or at that it's very likely. Once we get at least a single daily close below both above-mentioned support levels, we might open a speculative short position, but we think that it's too early to do so today.

Summing up, the short-term outlook for crude oil is currently too unclear to justify any trading positions, but the bearish case seems more likely than the bullish one at this time.

As always, we'll keep you - our subscribers - informed.

Trading position (short-term; our opinion; levels for crude oil's continuous futures contract): No positions are justified from the risk-reward perspective.

In case of the futures contracts that are more distant than the current contract, we think that adding the premium (difference between the July and other contracts) to both: stop-loss and initial target prices is justified.

Thank you.

Nadia Simmons
Day Trading and Oil Trading Strategist
Przemyslaw Radomski, CFA
Editor-in-chief, Gold & Silver Fund Manager