Oil Pullback Expected

Tradable assets normally have some sort of retracement in the middle of a trending move.  Cycle traders would say the asset is trading into a mid cycle low.  Oil trades in 30-50 day cycles.  I expect that since this is the first cycle out of a yearly and intermediate cycle that it will take longer to complete its move.  My expectation all along has been a rally to around $56 on the Dec.    Today marks day 15 of this new daily cycle, so I am thinking that this will be a mid cycle retracement. 
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​I have stated before that I thought oil would find some resistance near the 200 day moving average at $52.50, and oil made it to $52.60.  Now we are having a mid cycle correction.  This is why I had not pushed up the stop from $48.....because I did not want to be stopped out of the position from a mid cycle correction.

As of this writing, oil has made a 38.2% retracement.  We might even get a 50% retracement, however I doubt it.  If price falls below the 50% retracement, we will get stopped out of our position for a small gain. 

​A retracement such as this does two things.  First, it creates a point to set a cycle trend line (green line on chart).  This will be an important technical level to follow moving forward. 

The second thing the retracement will do is re-set sentiment.  Sentiment was about 50% yesterday.  This will lower sentiment a few points and set the table for the next leg higher.  By the time oil reaches $56, we should reach excessive optimism levels.  At that point, we will either exit the trade or push the stop very tight.