Will Crude Bounce Off of the 200 EMA?

After a very bullish week for equities, crude prices still fell over 5%. The oversold conditions last week warranted a small rebound in the short term. Which I was talking about in my comments.

The recent comments by J.Powell, coupled with weak economic data, lead investors to believe that the interest rate hiking cycle may be over. This pushed equities higher.

The weak economic data is having the opposite effect on crude prices. At the beginning of the week, cude experienced a small rebound, as expected, but ended the week on a sour note. The weak economic data in the US has added to the current bearish sentiment towards oil.

Usually, weak economic data can indicate weak oil demand. Last week manufacturing PMI printed its worst reading of this whole year. This is just another nail in the coffin. Because we have been in contractionary territory all year, as you can see.

The laws of supply and demand are not helping oil prices. Weekly crude stock had a slight uptick, which didn't help the oil bulls last week.

The trend in net long positions has been falling since the start of October. This data correlates almost perfectly with the October selloff in oil.

For more of a rebound in crude, then we need to see the price move above this 4-hour resistance level. This will put the short-term indicators in bullish territory, warranting a short-term bounce at least.

The rebound was less apparent in cude's price action. But we did see a much more significant rebound in energy related tickers and ETFs this week. So, my rebound thesis I spoke of last Sunday was almost right on the money. Check out my previous comments on oil by clicking the link below. There is still valid info there.

So what is next for the black gold? Let's check out the technicals to get a good idea.

I should mention that if the price of XES can climb above the resistance line I've highlighted below, then things will look less bearish as the short-term trend will be changing at that point.

Things still look bearish. The price of crude is below the major Fib level I have been talking about for some time. But it still hasn't completely dropped below the 200 EMA.

Typically, in a bull market, you could expect a rebound around the 200 moving averages. If we catch a rebound soon and the price climbs above that Fib level things will look better. But we might need improving economic data or some positive catalyst of some sort to see this happen. And so far the economic data shows no signs of improvement. So as of right now, I am still bearish on crude in the short term.

As always, I am not a financial professional, and this is not investment advice. Be careful and be patient. Dont anticipate the market. Rather, participate in the market. Give some of your investments time and know when to cut your losses. Don't be greedy. Don't invest in anything you don't understand. Don't put all of your eggs in one basket. Don't listen to the hype. Don't fomo or panic into or out of trades. Do your own due diligence. And just follow the trends. A trend is your friend. Good luck trading.