For the week ending September 25, 2020:
Before we look at today’s charts I would like to go over some challenges that we’ll face as the current impulse move in the PM complex continues to move higher. It’s not every day that you will find yourself getting in close to the bottom of a multi month rally. One of the biggest problems I’ve witnessed over the years, especially with PM stock investors, is they grow complacent as the rally phase starts maturing. They believe they are invincible as their profits rise and everything is right with the world. That complacency usually means not getting out close to the end of the impulse move which is extremely hard to do even if you’re looking for a top. They will either sell in panic as the correction takes hold or hang on to their positions during the entire correction which is emotionally hard to do.
Recently, we posted a multi-part research post suggesting a collapse in Crude Oil could be setting up and how we believe this decline in energy prices may lead to a broader market collapse in the near future. Crude oil fell more than 3% on November 19 in what appears to be a major price reversal. On November 20, inventory levels and other key economic data will be presented – could the price of oil collapse even further over the next 60+ days?
Here is a link to our most recent multi-part article about Crude Oil from November 13 (just a week ago): https://www.thetechnicaltraders.com/what-happens-to-the-global-economy-if-oil-collapses-below-40-part-i/
Our original research post, from July 2019, included this chart showing our Adaptive Dynamic Learning (ADL) price modeling system and where it believed the price of oil would go in the future. This chart highlights expected price ranges and directions all the way into April 2020 with a low price level near $25 somewhere between February and April 2020. Is Oil really going to reach a low price near $25 ppb in the near future?
Oil price is melting down like there’s no tomorrow. How else could we describe the bloodbath? Fresh monthly lows being hit on a daily basis. Slicing through important supports. With such a weak close to the trading week, how will black gold fare the next one? Clearly, the most recent Mexico tariff announcement hasn’t helped and it’s widely felt in the markets, including this one. Better news on the horizon?
Let’s take a closer look at the chart below (charts courtesy of http://stockcharts.com
