Brent crude (QA) still looks to be in a major (long-term) 3-wave downtrend, with the spot-month contract extending the move to a low of $70.13 before rallying to close out the month. This was enough to pull monthly stochastics below the oversold level of 20%, setting the stage for a potential bullish crossover. 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 December move below the target price of $76.50. If not, they could’ve been lifted during the March selloff. 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 spot-month contract spiked to a low of $64.12 during March before rallying, nearly completing a bullish spike reversal. Monthly stochastics are below the oversold level of 20%, but came up short of completing a bullish crossover at the end of the month. 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, traders would be looking to cover shorts in the not-too-distant future and going long. Buy stops could 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 $2.5021 during March 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: New longs could’ve been established near the December close of $2.4783, with sell stops below the December low of $2.0204.
Natural gas (NG) followed the February bullish spike reversal with a bearish outside range, stopping out previously established long positions. Theoretical Positions: None.
