Crude oil has been in a trading range for three weeks and is now signaling a possible downside breakout. The recent high price of 110.55 for West Texas Intermediate Crude was alarmingly close to the benchmark high of last May, and incumbent politicians familiar with Hidden Pivot analysis must have been relieved to see the impulsive move back down to 104.35. The price popped back up on Friday morning, but most of that rally has already been surrendered. In the early Monday hours, the market has confirmed a prominent bearish pattern that targets 102.00. The midpoint of the pattern is at 105.10 and looks like a long-side opportunity. Traders wishing to give the volatile oil market a wide berth can put stops as low as 104.89, but 104.99 might suffice. The buy order can be close to the pivot, given the magnetism of the 105.00 level. Of course, we won’t be surprised if the magnet isn’t as strong as it looks. (Posted by Doug “harry” McLagan)
