Brent crude (QA) looks to be in a major (long-term) sideways trend between the previous 4-month high of $87.49 and 4-month low of $68.20. A bullish reversal would be completed with a move to a new 4-month high. Monthly stochastics completed a bullish crossover below the oversold level of 20% at the end of April, a signal the major trend could soon turn up. Theoretical Positions: Short from the June 2022 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. Stops would be above the previous 4-month high of $87.49 (April 2023) with new longs established at the same time.
WTI crude oil (CL) is also in a major sideways trend between $83.53 and $63.57. Theoretical Positions: Long positions would be established on a move above the previous 4-month high of $83.53 (April 2023).
Distillates (HO, heating oil, diesel fuel, jet fuel, etc.) confirmed a new major uptrend in late July as it posted a new 4-month high. The initial upside target area is between $3.32 and $3.69. Theoretical Positions: Traders could be long just above the previous 4-month high of $2.9198. Additionally, those needing to cover diesel needs could do so near the July close of $2.9855 or wait for a Wave 2 selloff. If the latter, the target area would be between $2.50 and $2.34.
RBOB gasoline (RB) remains in a major 5-wave uptrend with the next upside target area between $2.9011 and $3.1732. The spot-month contract hit a high of $2.9960 during late July before closing at $2.8955. Theoretical Positions: New longs could’ve been established near the December 2022 close of $2.4783, based on a bullish spike reversal. Sell stops would be below the 4-month low of $2.25 (May 2023).
Natural gas (NG) still looks to be in a major sideways trend between $3.037 (high from March 2023) and $1.946 (low from April 2023). The spot-month contract did complete a bullish spike reversal during April, though I am waiting for confirmation of a new uptrend with a break of the previous 4-month high. Theoretical Positions: With monthly stochastics well below the oversold level of 20%, the logical move is to see a bullish breakout. it’s possible traders established long futures positions near the April close of $2.41. If so, sell stops would be below the April low of $1.946. Others may be waiting for a move to a new 4-month high beyond $2.878 (May 2023) before going long.
