Fusion Investor Chatbox

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Friday, July 18, 2008

Crude Oil Chart Update

Penning this 7:41 AM, 18 July, 2008.

Last night turns out to be a critical day for crude (August 2008 contract). To me, the important $132 support was broken, and touched a low of $129, before closing $129.29. Next support seen at $120-$122, and the next one at $109-$110, etc.

I believe some if not many longer-term traders will have set their stop at around $130 (plus minus $2) last night. If so, many should have been taken out of their long position already. Technically, this is a breakout on the downside, and some traders will have joined the bandwagon on the short side too last night (and the prudent ones with stops). The extent of the downfall over the last 3 days is quite massive, taking out nearly $17-$18. This is no small fall and in my opinion - has changed the long term character of the chart. Of course, prices almost never fall in a straight line (except in panics and even then ...) - you can expect rebounds soon - but on most people's minds now is whether crude will be able to surpass $148 again in the next few months.

The price chart below should say it all.

Naturally, the US markets cheered the fall in crude, by rising strongly for 2 days in a row. European markets closed in decent green as well last night. I expect Asian markets to follow.


lsb said...

Private chat, it is presumptuous that one profit from a chatbox. Many do not have the time to actively chat, and scan the boxes to gauge the mood of the market players. It is even more important to visit a live gallery to gauge the mood. The knowledged do not set the pace, in 1993, it was the first time players and the ignorant that drove the market.

lsb said...

Dont even try to corner a counter, we tried to do that and was clobbered. You are just no match for the big boys.

Seng, just a response to a comment in your box. Sorry to post here as i ve no wish to reg and participate in your box, regards.

Seng said...


Thanks for your timely comments.

"Private chat, it is presumptuous that one profit from a chatbox."

I think there are 2 ways that you can view this.

The first - hoping to follow others - is futile. In this sense, I agree very much with your comment. By the time someone says they buy, the low price is most likely gone. By the time someone says they sell - IF they even say they sell - the high price is most likely gone.

There is a second opposing view that chatbox are beneficial if used properly and positively, but it's too long for me to explain here.

I really think you should consider chatting, as you raise many interesting topics.

"Dont even try to corner a counter, we tried to do that and was clobbered. You are just no match for the big boys." - I'm not sure who in my chatbox tries to corner a stock, but this is sound advise anyway, so, I'm publishing it here too as a precautionary statement.