Oil is perhaps building a scale invariance pattern .
On the left, the daily chart starting to form an inverted H&S lying on the 200 DMA, the neckline of which is approximatively the 20 DMA.
On the right, is the 5 min. chart, presently showing the second shoulder which is itself an inverted H&S, the neckline of which is approximatively the 200x5 min. MA.
WARNING:...
Well, the baseline of our triangle was broken, and with some strength (i.e. significance).
Textbooks say we now should reach the inferior line of the channel.
Meanwhile, the 0.6818 level (the 23.6 Fibo level mentionned in the previous post) is now acting as a resistance.
A rare feature in this timeframe.
Many times, a so-called Golden Cross is pointed at, when actually it is not a truly one.
A real Golden Cross is when an ascending 50 x MA is crossing an ascending 200 x MA (x being the timeframe -Day, Week, Month...)
Of course, the larger the timeframe, the more significant is the pattern.
I personally like to consider a...
Since the last post in November, Copper went sidelines despite some false upward and downward breaks.
The resilient support of the 200 DMA is however outstanding.
Let's see if this time will be "the one".
Tic, toc, tic, toc,....
After several attempts, we are again above the 200 DMA.
Interest rates movements these last weeks, as well as inflation expectations, were somewhat clumsy with the market changing its view several times (ED futures now indicate 3 hikes in 2022). Along with that and worries over Chinese new policies, no clear trend was able to materialize in Copper.
Now that we've...
Well, the pullback was short ! The large green candle of today is nice as it overcomes the 20 DMA (blue line).
Next resistances are the 50 DMA (red line) and the 23.6% Fib.
After a final jump to attract buyers, we eventually proceeded with the due correction we were waiting for.
Whether it will be a pullback en route to a construction of our inverted H&S, or a resuming of the downtrend, will be determined following its shape and depth. Above the 200 DMA (orange line), probabilities remain intact. The support of last resort is the...
Same general comments as yesterday. We can notice that the recent up-leg topped at the 50% Fib of the large move from 2016/04/05 to 2016/06/09.
20 DMA (blue line) role as a resistance confirmed.
Let's observe how this pullback unfolds, as long as it stays above the 200 DMA (orange line).
As expected (see previous posts), the 20 DMA provided with a resistance.
To go on with our building of an inverted H&S, a pullback must not drag price below the 200 DMA.
Correction to the previous post: The neckline of our small scale inverted H&S is the oblique red line. After being broken, this line became a support during Friday price action.
What's next ?
Probabilities for completion of the large scale H&S are increasing (see previous posts), but we are not done yet. Consolidation pullbacks may occur. One to be expected is...
Reminder: We had yesterday a large green daily candle which crossed upwards the 200 DMA above the 50% Fib of our probable pattern (from 2016/02/11 to 2016/06/09 - green Fib - Daily chart) - see previous posts.
What could be unfolding today is a classical phenomenon in complex systems, namely a Scale Invariance. The right shoulder of our inverted H&S is itself an...
We got it !
Above the 200 DMA (orange line) probability of building the H&S pattern increases a lot.
First step: Let's see if there is a follow through.
WTI price crossed downwards the 200 DMA (orange line) but is still above the 50% Fib of a possible reversed H&S pattern.
Above this 50% Fib (@ $ 38.85), probability for building this pattern remains.Under this Fib, it evaporates.
Crossing upwards the 200DMA with a large green candle is a buy signal - Target $ 50.
Then, after confirmation of pattern completion, we...
