Energy

Crude Oil Gearing up For a Rally

Posted 02/01/2019 8:08AM CTPhillip Streible

Crude oil futures continue to coil in the all too familiar Bill Williams alligator pattern. This is where the belief that the markets spend about 75% of the time consolidating and 25% of the time trending once the sleeping alligator wakes up. Oil right now has the fundamentals lining up to make an explosive move higher while the biggest headwind crude oil faced last year was Donald Trump’s aggressive stance towards pushing prices lower. He won that battle and has since then shifted focus towards the border wall and the U.S./China trade agreement. Once the trade agreement has been resolved we should see the bull camp take over on a reemergence of the Chinese economy and a pickup in exports. This leaves the import picture in question with a very delicate situation in Venezuela. Venezuela historically has exported on average 16 million barrels to the U.S. and now those exports have been shut off.

Below is a daily March Crude Oil chart where a push over $55 should clear the way for an aggressive move back to the 200 DMA.

Crude Light Mar ’19 Daily Chart

Crude Light Mar '19 Daily Chart

Phillip Streible

Early in his career Phillip began trading his own account as a screen trader focusing on the metals, grains and stock indices. He then became a Series 7 licensed financial consultant with A.G. Edwards. Later, he expanded his trading experience into a Series 3 licensed commodity broker with Investment Analysis Group. Most recently he was a senior market strategist at MF Global before joining RJO Futures in October 2011 as a senior commodities broker. As a senior commodities broker his goal is to show clients how to anticipate, recognize and react to bull and bear market conditions through the use of technical analysis techniques that help them to define risk.