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For more than 12 months, Crude Oil WTI has been trading in sync with the US stock markets, more or less completing their cycles 1 to 1.
Since today starts the traditionally weakest stock month by far, let's see what could threaten the crude oil in the course of the normally quite turbulent September. This promises to be quite turbulent indeed. both in the oil, but also in the stock markets. But that does not necessarily mean that the markets are dropped or will sell-off. On the contrary, since both crude oil and the US stock markets trade in the bull market, the old rule is: "In bull markets most of the surprises come on the upside!".
Below is Big Picture of Crude Oil WTI Futures Contract through GUNNER24 Lens – the very long-term oriented 33 Candle up in the monthly chart, that starts forecast at 2016 bear market low that triggered a multi-year long countertrend which is still trading within the first GUNNER24 Square:
The bull that has started at # 1 // 2016 bearish extreme topped for long-term at final 2018 High after a 33-month candles sustained upward cycle. Obviouly that run was oriented to the 34 Fibonacci turn number which triggered the still running countertrend or monthly downtrend and finally defined among other stuff the Blue Arc, an important future target, whose first-ever backtest is still pending.
Usually the Blue Arc magnet will be able to radiate very strong future resistance and is predestinated to produce another important cycle high at first backtest/test.
Shown scaling should be fine also for the coming years because at # 15-low and the # 35-low are nearly 100% accurat – positive – test`s of 1*1 Angle and 1*2 Support Angle which became yearly Gann Angle support and most important rising 2019 support after the final 2018 Low at 42.36$ is triggered by this currently and for the future most important bull market support.
Please oberserve that the 2019 High was negative test of 1*1 Angle from below, therefor 1*1 Gann Angle is a nicely confirmed and likely very strong future resistance upmagnet.
2018 Low is triggered by 1*2 Support Angle, the 2019 uptrend has tested 1*1 Resistance Angle negative from below. Monthly downtrend starting at 2019 High could again test back 1*2 Support Angle, strongest down magnet below current 55.16$ which is August 2019 close.
Immediately at the August 2019 opening auction the highest price of the month was achieved. That's not bullish. In addition, the August printed a small lower low (50.52$) in comparison to July. July low is at 50.60$. That's not bullish either. And of course it`s bearish that the still running monthly downtrend made a next lower close.
And in front is the traditionally weakest stock market month. Which can also lead to significant oil losses - if crude oil wants to maintain its synchronicity with the trends of the US equity markets ... and if they show weakness in the traditionally difficult September.
Conclusion of the current chart situation:
All these negatives allow - at least theoretically - that the monthly downleg has to test again the yearly 1*2 Support Angle before the next sustainable upward cycle wants to start.
I strongly recommend to buy the next rising 1 * 2 Support Angle test if it should take place towards the end of September or the beginning of October. Since the 1*2 Support Angle, as explained above, should offer maximum strongest support for the rest of 2019 and beyond.
==> Buy crude oil at 47.15$ until early-October IF reached. For bull market month # 45-September the yearly 1*2 Support Angle runs at the recommended 47.15$. For # 46-October 1*2 Support Angle is at about 47.45$!
The sketched long entry is a very low-risk long entry. Because usually the second test of this strong yearly support should trigger a next, even powerful, monthly upleg, which in the best case should lead to the usually necessary backtest of the Blue Arc in course of # 48-December 2019 at around 64$!
But why is oil now sitting proverbially on the powder keg mentioned above?
For this we drop the monthly chart and switch to the weekly chart and place at the achieved 2018 Low (Xmas lows... = 100% accurate successful first test of yearly 1*2 Support Angle) a classic 13 Candle GUNNER24 Up Setup and recognize these special features and this wonderful tension:
First of all, the axis scaling must be perfect because the natural 1*1 Angle resistance which springs from the important high of the year 2018 was responsible for the high achieved this year. ==> 2019 High tested important yearly resistance angle from below. As long as crude oil trades below 2018 High 1*1 Resistance Angle it is nice short-candidate. IF 2018 High 1*1 Resistance Angle is overcome on weekly closing base crude oil is a heavy bullish market cause then most determining resistance of 2019 will be finally overcome!
Secondly, the axis scaling must be perfect because the 1*1 Angle which springs from the final low of 2018 at first test triggered a cycle low or first important higher 2019 cycle low.
And thirdly, this implies that the axis scaling must be perfect because the Blue Arc resistance meanwhile forms 3 tiny lower weekly highs in succession. Or: Blue Arc is downward sloping week high resistance, nearest strongest resistance.
Since the beginning year the 1*1 Bull Angle is rising closing base support. So 1*1 Bull Angle acts also as a yearly support angle throughout August, often at risk. But the 1*1 still holds, was even re-captured into the always important monthly close of August 2019.
==> From below supports the still quite strong holding 1*1 Bull Angle, from above the Blue Arc resistance puts strong bear pressure. Also, the trading range between Blue Arc resistance and 1*1 Bull Angle gets smaller and smaller. So the tension builds up, which should be soon before its dissolution! = Breakout Mode or Powder Keg Setup.
And well, cause the monthly situation and above analyzed outlook is more bearish then bullish the final downward break of the 1*1 Bull Angle should be preferred the coming 8 to 10 trading days, and Boy Oh Boy, such break of most important nearest rising support on yearly base should or at least could trigger a hard downer or even a sell-off into 47.15$ activated monthly downtarget.
On the other hand the first weekly close above Blue Arc in course of September will be a very strong buy signal and activates the monthly uptarget at 64$ which then should be worked off until year end!
The Blue Arc resistance for the coming trading week resides at 56.64$ and lowers each coming week candle by 25-30 cents!
Be prepared!
Eduard Altmann
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