Oil weekly technical update

Oil weekly chart is moving closer to the low around 55. We entered a weekly 11 count, hence at least one weaker weekly close is required. That is although the daily chart produced a daily Combo 13 yesterday and a SEQ 13 today. The weekly chart overrules the counts and the daily XOI confirms with a daily SEQ 10 that the oil-complex needs still to come down a bit. I really wonder where the demand supply market has disappeared to suddenly as some tried to give the 150 level a sense – has $100 demand
vanished?!
Well, in any case, as Russia is back in a (not yet deep) crisis and many of the hyped Arabian we-can-buy-the-world projects are on hold – a short covering rally will start soon in 1-2 weeks once the bottom is set. The magnitude is likely a 38% retracement of the 95 decline gives a 35 magnitude back up to 90 levels probably. In order to see the full scale recovery, we need the dollar to make a high to support a bigger oil upside move. That is still in progress but rather may come early next year, as the liquidation will be lasting up to that point anyway.

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~ by behindthematrix on November 11, 2008.

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