Brent crude (QA) still looks to be in a major (long-term) 3-wave downtrend, though the spot-month contract continues to consolidate above the December 2022 low of $75.11. This indicates the market may be building a long-term bottom, particularly with monthly stochastics moving below the oversold level of 20%. Theoretical Positions: Short from the June close of $114.81 possibly. If not, shorts could’ve been established at the July close of $103.97 after the spot-month contract posted a new 4-month low below $96.95. These short positions may have been lifted with the the December move below the target price of $76.50. If not, they could be lifted on the next test of that mark. Buy stops would be placed above the December high of $89.41.
WTI crude oil (CL) looks to be nearing the end of its major 3-wave downtrend. The December low of $70.08 continues to hold with the spot-month contract consolidating again during February and monthly stochastics dipping below the oversold level of 20%. Theoretical Positions: Short from the June close of $105.76 based on a bearish 2-month reversal. New or additional short positions could be near the July close of $98.62 based on the spot-month contract posting a new 4-month low below $92.93. These shorts were possibly lifted with a test of the 50% retracement target of $73.57 in both December and January. If not, that would be the target for buying shorts back during February. Buy stops would also be placed above the December high of $83.34.
Distillates (HO, heating oil, diesel fuel, jet fuel, etc.) extended its major 3-wave downtrend to a low of $2.6577 during February with the next target down at $2.3531. Like the crude oil markets, monthly stochastics have dipped below the oversold level of 20%. Theoretical Positions: None.
RBOB gasoline (RB) remains in a major 5-wave uptrend with an initial target price of $2.9011. Theoretical Positions: Short positions from the June close of $3.5363 should be covered near the December close of $2.4783 for a gain of $1.058. New longs could’ve been established at the same price, with stops below the December low of $2.0204.
Natural gas (NG) completed a bullish spike reversal during February, confirming its major trend has turned up. Theoretical Positions: Longs could be established near the February close of $2.747 with sell stops below the February low of $1.967.
