If we do continue to break down you have plenty of time to get involved in that move, just like you would have plenty of time to ride an uptrend.

• The West Texas Intermediate Crude Oil market rallied a bit during the trading session on Friday, after initially falling in reaction to the jobs number.
• It is currently hanging about the $104.50 level, putting this market just below the previous uptrend line.
• The previous uptrend line has held as resistance so far, so “market memory” appears to be held at the moment.

If we can break above the previous uptrend line, then it’s possible that the oil market may go looking to reach the 50-day EMA above, which is just below the $110 level.

Breaking above the $110 level opens up the possibility of a move to the $120 level, which might take a bit of effort, but it is most certainly a possibility. On the other hand, if we turn around and break down below the lows of the trading session on Friday, then I think we will kick off more selling pressure.

Oil Supply and Demand

Unfortunately for oil traders, there are so many different things moving at the same time that could cause problems in both directions that this is going to remain a very difficult market to get a handle on. The most important thing you can do is limit your position size and keep a cool head. The supply of crude oil is still far below where it normally is because we had just spent the last two years hiding in our homes instead of drilling for crude oil. With that in mind, it looks as if the supply is nowhere near strong enough or demand, but it should also be stated that there is serious concern about demand destruction going forward as it looks like we are heading into a recession. Because of this, the market looks as if it doesn’t really know what to do, but it is worth noting that the biggest candlesticks as of late have all been red.

The 200-day EMA has offered significant support near the $95 level, but if we were to break below there, it’s officially the end of the trend, and we would probably fall quite drastically. Nonetheless, I think you are probably better off waiting to see what happens with this trendline retest than anything else in the meantime. After all, if we do continue to break down you have plenty of time to get involved in that move, just like you would have plenty of time to ride an uptrend.

Ultimately, if we did break above the $110 level, that would be a huge change in attitude.

The West Texas Intermediate Crude Oil market has rallied rather significantly during the trading session on Thursday to test the bottom of the previous trendline. We had been in a positive channel, and therefore now that we are approaching the bottom of the trendline suggested there should be a certain amount of “market memory” in this area, not to mention the fact that the $105 level is right in that area.

Underneath, we have the 200 Day EMA that was tested during the previous trading session, right around the $95 level. The market is paying close attention to the $95 level, as it could open up a massive drop from there. If we were to break down below the $95 level, then it allows the possibility of a major selloff. On the other hand, if we were to break above the $105 level, it’s likely that we could go to the $110 level, which is right around the 50 Day EMA. Ultimately, one thing that I am paying close attention to is the fact that we have seen a lot of significant noise over the last couple of weeks, as we have seen a lot of large red candlesticks. That typically means that there is more aggression to the downside than the up, so it makes quite a bit of sense we would see further selling.

Ultimately, if we did break above the $110 level, that would be a huge change in attitude. People are starting to worry about the recession more than anything else, which will cause a lot of demand destruction when it comes to oil. That being said, the market is likely to continue to see follow-through given enough time. The overall attitude of the market is one that is going to have to pay close attention to not only recession but the possibility that we have not been drilling for a couple of years, so supply is a bit out of whack as well.

I think the only thing you can count on in this market is probably going to be a lot of noisy behavior, therefore I think position sizing will be crucial. As long as you keep your position size relatively reasonable, you be able to navigate this market. That being said, it is worth noting that we did not break above the uptrend line.

It’s going to be choppy, so you need to be cautious with your position size.

The West Texas Intermediate Crude Oil market rallied a bit on Friday as we had been testing a major uptrend line. By counting the way we have, it confirms that we are still very much in an uptrend, or at least trying to save that uptrend. It is worth noting that the uptrend line sits just above the $100 level, so I do believe that the $100 level will continue to be important. In fact, it is essentially how I am going to define the overall trend, as a move below that level would have a lot of psychological influence on where we go next.

While things have been noisy over the last two weeks, it’s interesting to see that the trendline has held. If we turn around and recapture the 50-day EMA, just above the $110 level, I think it will bring in quite a bit more money, and people will be much more comfortable going long. Keep in mind that there are a lot of crosscurrents right now when it comes to crude oil, not the least of which would be fears about recession. In a recessionary environment, there will be less demand for crude oil, so that of course is negative for price. However, at the same time, we have to factor in the reality that during the pandemic very little in the way of drilling or exploration was done, so the market still has to deal with the supply catching up to the true demand.

China continues to go back and forth as to whether or not they are going to open up fully, and that has a huge influence on what happens with oil prices as China is the world’s largest consumer, followed by the US which is most certainly seeing a slowdown. With this being the case, it’s likely that we will continue to see a lot of choppy volatility, but as long as we can stay above the $100 level, I look at this through a prism of finding value. If we break above the $110 level and the 50-day EMA, I believe that it opens up the possibility of going back to the high again. Regardless, it’s going to be choppy, so you need to be cautious with your position size.

Buyers remain below $20k.

Previous BTC/USD Signal

My previous signal last Thursday was not triggered, as none of the key support or resistance levels which I had identified that day were reached by the price.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades may only be entered before 5pm Tokyo time Friday.

Long Trade Idea

• Go long after a bullish price action reversal on the H1 timeframe following the next touch of $19,164.
• Put the stop loss $100 below the local swing low.
• Move the stop loss to break even once the trade is $100 in profit by price.
• Remove 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to ride.

Short Trade Ideas

• Go short after a bearish price action reversal on the H1 timeframe following the next touch of $20,827, the descending trend line, or $23,000.
• Put the stop loss $100 above the local swing high.
• Move the stop loss to break even once the trade is $100 in profit by price.
• Remove 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to ride.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

BTC/USD Analysis

I wrote in my previous analysis last Thursday that we were seeing a bearish consolidation between $20k and $23k, with the current dominant wave at the time of writing being bearish.

I thought that longer-term traders should look for a short from another reversal at $23k or wait for a daily close below $19,500 which would be a very bearish sign.

This was a good call insofar as I was correct to look to the short side – the price fell over the day – and I was right to refuse to look for any long trades.

The technical picture now is still bearish over the longer and medium terms. There is a clear and strong long-term downwards trend, and the medium-term picture is dominated by the descending trend line which is shown in the price chart below.

I see the outlook as remaining basically bearish if the price remains below this descending trend line, but it should be noted that after last week’s strong fall of approximately 30% in value, we have seen buying below the big round number at $20k over the past few days. It might be that the downwards trend is going to pause here, or even reverse for a while.

I think the best approach here will be to take a short trade from a bearish reversal which might set up at the descending trend line or following a daily (New York) close below $19,164.

If the price can get established above $23k, which I think is unlikely to happen, that would be a surprising bullish sign and indicate a deeper bullish retracement would probably happen quite quickly.

Concerning the US Dollar, the Chair of the Federal Reserve will be testifying before the House of Representatives at 3pm London time. There is nothing of high importance due today regarding Bitcoin.

Our expectations suggest that the index will continue to decline during its upcoming trading.

The Dow Jones Industrial Average returned to decline during its recent trading at the intraday levels, to suffer sharp losses in its last sessions by -2.38%. The index lost by -809.28 points to settle at the end of trading at the level of 33,240.19, after its decline in Friday’s trading by 0.70% .

All 30 components of the index declined without one exception, and the stock that fell the most in percentage terms was Nike Inc. Cl B rose -5.80%, followed by Boeing Co. by -0.04%, followed by Visa Inc. Cl A at -4.22%.

The main readings for Tuesday’s busy spreadsheet were a small drop in consumer confidence in April, higher home prices, and a slowdown in new home sales. New home sales in the United States fell to 763,000 homes at an annual rate in March from 835,000 homes in February. While the Conference Board’s measure of consumer confidence fell to 107.3 in April from 107.6 in March, less than the 108.2 expected in a Bloomberg poll.

Although first-quarter corporate earnings reports were above expectations, this may not be the best representation of what to expect in the future. The Federal Reserve is raising interest rates to stave off high inflation and other threats to global economic growth such as the war between Russia and Ukraine and rising commodity prices remain.

Technically, the index continues to decline amid the dominance of the corrective bearish trend in the short term, with the continuation of negative pressure for its trading below the simple moving average for the previous 50 days. This is in addition to the influx of negative signals on the relative strength indicators, as shown in the attached chart for a daily period, bringing the index down. The latter is based on a major bullish trend line over the medium term.

Therefore, our expectations suggest that the index will continue to decline during its upcoming trading, especially if it breaks the support level 33,271.90, to target immediately after that the first support levels at 32,071.40.

At this point, I think that we will continue to see a lot of downward pressure, so I have switched from buying the market to selling it.

The West Texas Intermediate Crude Oil market broke down significantly during the trading session on Wednesday to slice through multiple areas of support. The initial part would have been the $99 level, but we also have the 50-day EMA that is coming into the picture. Now that we sliced through that as well, it is a very negative look to this market right now, and it is more likely than not going to continue to cause major issues. I do believe that the uptrend line being broken is a very negative sign as well, so it is possible that we could be looking at the end of the uptrend in oil.

We have seen several “lower highs”, and I think you should take a look at this through the prism of whether or not demand is getting crushed. After all, we have seen a build in inventory and a drop in demand for gasoline. It seems as if we have potentially reached a peak in the market, and of course demand. Remember, the entire story of crude oil rallying was due to the fact that the markets were reopening after the pandemic, and there would be a huge surge in demand. However, it now appears that a lot of economies around the world could be going into recession and that in and of itself could cause major problems for crude oil.

If we do break down from here, it is very possible that the $90 level will be the target, but that does not necessarily mean that we will get there overnight. However, it is obvious that there is a lot of weight around the neck of the market right now, and at this point, I would need to see it break back above the $105 level that I would be comfortable buying. This is a market that continues to see a lot of volatility, but I think we have finally capitulated to the idea that perhaps things are not as strong as once thought. If that continues to be the story, then it is difficult to imagine a scenario where crude oil suddenly takes off to the upside. At this point, I think that we will continue to see a lot of downward pressure, so I have switched from buying the market to selling it.

Wait for a daily close in order to place a position because the intraday moves have been so violent.

The West Texas Intermediate Crude Oil market has fallen a bit during the course of the trading session, reaching the 50 Day EMA during the session. At this point, the market continues to see a lot of support in that area, right along with the $99 level and the uptrend line. The market is certainly threatening a breakout, but at this point, if we can bounce it would be a good sign.

The West Texas Intermediate Crude Oil market has made a lower high, but it has not made a lower low yet. I think it is a scenario where we are trying to figure out whether or not this market is going to break down, or if it is simply going to continue the very volatile move to the upside. The volatility has been a sight to behold and is still very much a part of this market. Because of this, I believe that the market will be one where you have to wait for a daily close in order to place a position because the intraday moves have been so violent.

Keep in mind that there are many concerns out there beyond the war in Ukraine. For example, global economies are slowing down and that could bring down the idea of the demand for crude oil. We have also seen the Biden administration suggest that they are going to release 1 million barrels per day from the Strategic Petroleum Reserve, which could put a bit of a damper on pricing. Whether or not it works is a completely different question, but at this point, there are a lot of things going on that could come into the picture.

If we break above the $102 level, then we could go looking toward the $107 level above, which would be the most recent high. If we can break that, then the market is likely to go much higher. The market will continue to see a lot of back and forth, but it still has an upward tilt from what we can see so far. Ultimately, this is a market that has been so noisy as of late that it is very difficult to hang on to it with a large position. I would start with a small one, and then add as the market moves in your favor.