The energy markets continue to trade back into the low $40 range for front-month WTI Crude Oil before rejecting this price. Today we are seeing a rally back into the highs of last week and September. Since we have traded here before several times then reversed I’m expecting similar price action to occur in the upcoming days ahead. Fundamentally not much has changed in the oil landscape with China still carrying global oil demand. An update on the bearish side sees both OPEC and the IEA make downward global demand revisions to their forecasts this week. Surges across the world in COVID infection rates only strengthen my bearish mindset for crude oil. For these reasons, I want to fade today’s rally and establish a short position. We will be trading the December (Z) contract for additional time and because the volume-leading contract rolls to Z from X at the end of this week. I recommend the following:
SELL GCLZ20 @ 41.30 or @ Market
BUY STOP @ 42.20 ($900 risk per contract)
BUY LIMIT @ 39.50 ($1,800 profit per contract)
OR trade the Mini contract which is 1/2 the exposure per contract – QMZ20
*Risk/reward are calculated before commissions and fees*
15 MIN CL – TAS Navigator Trend Exhausted & TAS Ratio Crossing Over Lower = SELL
DAILY CL – Testing Resistance Level & TAS Ratio Crossing Over Lower = SELL
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