Crude Oil

By: Ed Carlson | Tue, Jul 9, 2013
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For several months I have been expecting a high in oil as of last Friday. A 34-month cycle (below) was my original suspicion for thinking so. But as you can see, the cycle calls for a high in June, not July. While the closing high in June has, as of last Friday, been exceeded, we won't know where the closing high in July will be for three more weeks. Friday's close at 103.22 is dead-on the 61.8% retracement of the 2008 bear market (as well as a declining trendline) giving us the perfect level at which to expect a possible top.

Chart 1
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The 5/31/13 rally has reached a level that makes it equal to the April-May rally and the stochastic oscillator is printing a negative divergence.

The daily Coppock Curve is not confirming new highs in price with its own new highs; ditto for the weekly. Last week was an expected 13-week cycle high and this week is a 21-week cycle.

As part of the "risk-trade" it would make sense that crude would top with equities which were expected to print a high last Friday due to a Lindsay Middle Section forecast.

A breakout above Friday's close can be expected to see crude rally to at least 107 and probably 110.

Chart 2
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Ed Carlson

Author: Ed Carlson

Ed Carlson
Seattle Technical Advisors.com

Ed Carlson

Ed Carlson, author of George Lindsay and the Art of Technical Analysis, and his new book, George Lindsay's An Aid to Timing is an independent trader, consultant, and Chartered Market Technician (CMT) based in Seattle. Carlson manages the website Seattle Technical Advisors.com, where he publishes daily and weekly commentary. He spent twenty years as a stockbroker and holds an M.B.A. from Wichita State University.

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