Oil has been on a very prolonged downtrend after the market calculates affects on Chinese oil demand as parts of the country shut down. Last week the highways in and out of Beijing were shut down. It is very likely the coronavirus numbers are much worse than are reported by the Chinese government.
Oil here is showing an exhaustion in the downtrend. We seem to not be making anymore lower highs...or it is tough to make a new lower high. From here, we have a double bottom, and potentially looking for a head and shoulders too which will give us our first HIGHER LOW in the new trend.
52 is an important flip zone not only because it is the lower high swing we are playing with on the 4 hour, but is also a big daily level:
This of course is the big support level we have been watching and we are retesting this now. In this downtrend on the daily we have made 2 lower highs so it is beginning to be an extended move. Watch to see how price reacts at this level and if we can get a daily close above here.
My thoughts on oil are still the same:
Oil should be heading lower due to the supply glut and the world is slowing down. This has been my opinion before the coronoavirus and the China issues.
However, oil must be propped up because the last time oil fell, banks in America were essentially forced to provide loans to these oil/shale companies, knowing very well they won't pay them back. They were forced because it meant thousands of high paying American jobs on the line. These oil/shale companies are now zombie companies. Oil now affects the financial sector. If oil issues occur, there will also be bank issues. This is why oil will need to be propped up.
Oil here is showing an exhaustion in the downtrend. We seem to not be making anymore lower highs...or it is tough to make a new lower high. From here, we have a double bottom, and potentially looking for a head and shoulders too which will give us our first HIGHER LOW in the new trend.
52 is an important flip zone not only because it is the lower high swing we are playing with on the 4 hour, but is also a big daily level:
This of course is the big support level we have been watching and we are retesting this now. In this downtrend on the daily we have made 2 lower highs so it is beginning to be an extended move. Watch to see how price reacts at this level and if we can get a daily close above here.
My thoughts on oil are still the same:
Oil should be heading lower due to the supply glut and the world is slowing down. This has been my opinion before the coronoavirus and the China issues.
However, oil must be propped up because the last time oil fell, banks in America were essentially forced to provide loans to these oil/shale companies, knowing very well they won't pay them back. They were forced because it meant thousands of high paying American jobs on the line. These oil/shale companies are now zombie companies. Oil now affects the financial sector. If oil issues occur, there will also be bank issues. This is why oil will need to be propped up.