Well, guys, it was not the best week for me – I got a cold and didn’t trade. But it was a great week for my husband – I lost my voice and, gosh, he was like: “Yes, yes, finally she is silent” lol. For oil traders it was a flat week. It was trading in $3 range mostly. I know many traders are so excited about Trump and lower oil prices. But, let’s be realistic – Trump can have short-term impact on the oil market, but he can’t change the economic processes and its basic rules. I think all traders have to read Adam Smith instead of blindly following politicians’ statements. At least you will understand what is the economy, how it works, what is energy and raw materials. It’s so important in an era of populism. And you will have a clear understanding that oil can’t stay for a long time below the cost of its production.
I am not advising to jump into longs right now, I am talking about realistic expectations. Over middle-term oil will recover and get back at least half of its losses. Next year will be mostly consolidation within this year’s range. But cycles are almost ready to change. I mentioned about it many times. In a few years (I expect 1,5 – 2,5 years) oil and gold will start it’s bullish cycle. Big rally for big profits. I call it life-changing trends and usually most of gains on managed accounts are done thanks to such moves. But let’s focus on how we can make money now.
Based on smaller time frames we can expect bounce up. I see possible Whyckoff accumulation, where Spring – 49.50, Test – 49.80. But we need to wait for confirmation. Not enough price action yet to say for sure that we are in the accumulation phase. So, don’t hurry and wait a bit. Once market meets entry conditions, I will go long for 52.5 and if Wyckoff breakout happens 54.5 and 58. Pay attention for OPEC meeting on December 6, 2018. Possibly it will be a catalyst for the rally and price recovery. Other way, stick to scalping in both directions till market will give a nice entry for swings.
EUR/USD played nicely as per my previous forecast. First week of December is usually consolidation time in EUR. So, I expect to see range trading with small drifting down. My target is still 1.1200. We are likely to build channel down. If that happens, look for signs of weakness near trade line and go short. But be ready for choppiness – ups and downs all the way to 1.1200.
Wishing you a great week!
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