Pushing Up Oil Stops

The oil positions have not provided the returns so far that I had hoped coming out of an intermediate cycle low.  I must admit I am a bit disappointed.  The chart below shows how explosive returns can be as price rallies out of an intermediate cycle low.  I attribute the sluggishness this time to the fact that sentiment was not at an extreme.  Extreme sentiment fuels hard rallies.   The chart also shows how common for mid cycle lows to occur early at intermediate cycles, just as this one did. 

I have pushed up the stop for $46.50 to lock in a profit.  I recommended buying the position at $45.40, so this locks in a profit of $1.10, or $1,100 per contract.

Bull markets are marked by right translated cycles.  The oil cycle usually runs 30-50 days.  For a cycle to be right translated, then it must top at least after the cycle is half the way finished, meaning 15-25 days.  Oil is presently on day 20.  The previous high was on July 5, which was only on day 9.  For this to be a new intermediate cycle, its first daily cycle should be right translated.  I think it will be, but this sluggishness has factored into the decision to tighten the stop.

​This sluggishness is also tempering my expectation for this trade.  My initial expectation was for oil to make $52-54 in its first daily cycle, I am beginning to believe it will take at least two daily cycles to get there.  That being the case, I may recommend that we exit positions should oil reach the 38.9 Fibonacci at $49 if price must grind higher to get there.