Brave move nordesmic. I'm waiting for a bit more confirmation of the trend then I'll be buying and trading dips on the way up. I know you like TA. I got this in my inbox the other day.
http://www.dailyfx.com/forex/techni...date/2015/10/19/Crude-Oil-TA-10.19-TYOil.html
What happens if the tests of those Fibonacci support levels end up failing? Not that I think they will. That's why I think you are brave.
Interesting their take on volatility.
"The nature of the Oil volatility index is that less volatility is expected in the future, but that is often interpreted as a bullish sign as fear, and lower prices go hand-in-hand with volatility.
The Daily crude oil price chart is looking similar to late March of this year. At that time, price move aggressively higher from a new low only to retrace roughly a third of the move before eventually breaking out higher, completing a 50% balance to the upside. In addition to the similarity of price action to prior breakout, crude oil price has held Fibonacci support around $44.80 per barrel of the August 24 – August 31 range. The longer we hold above this range, with declining volatility expectations, the more likely we will see oil price crawl higher from these nearly decade low prices."
Your cash position logic has served you well before. Let's hope you are also right on this occasion.
SXY is also holding up well against the transient "China data" oil price dip. Personally I don't think China has much to do with the medium term oil price as they are still busy building and filling critical strategic reserves at this current time and the real energy driver behind the structural side of the Chinese economy is not oil. If anything, as the economy moves more to consumption the Chinese may take up driving more cars if their pollution levels and road congestion allow.
It's hard to be patient on this oil trade, but I'm convinced that patience will make me a lot of money in the end.
Eshmun
