Oil

Back on June 27, I sent out an email notification that oil was tradable after breaking out above its daily cycle downtrend line.  This probably marked an intermediate cycle bottom and created a tradable area to enter another synthetic grain trade.  My recommendation was to buy oil at $45.40 using the December crude contract.

Oil peaked early this morning at $48.25 but has been on a deep pullback every since and is presently trading just off the low which was $46.30. 

​Could this be the beginning move down to new contract lows?  Perhaps, but already I have stops in with my customers at $44.20 so that risk is pretty slim.  What I expect is happening now is a natural cycle event where oil is moving into a half cycle low.  On the chart, this simply becomes the second point where by a trend line can be created.  For anybody who would like to "hop on the oil train", this would be the place to do so.  If you already have taken this position but would like to add to it, this is the place to do it.  I still expect oil to reach the 200 day moving average which is at 52.  There is still a lot of profit left in this trade.