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Higher Highs, and Higher Lows - Can WTI Crude Continue Higher?


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Crude oil futures have now rolled into the December 17 contract, and the Daily Continuation Chart continues to show a market that is relatively range bound even though price action is forming a constructive pattern of higher highs, and higher lows. These stair steps higher are breaking above downward sloping trend lines drawn against the February, April, May, and August highs, as well as holding above upward sloping trend lines drawn against June and August lows. This technical picture is added to by two supportive Fibonacci zones (50% lines) at 49.22 and 47.46, which should find a cluster of buyers utilizing these tools.

The most recent EIA Petroleum Status report (10/18/17) saw a drawdown of -5.7 million barrels, which was higher than expectations and over double last weeks release of -2.7 million barrels. This report is considered bullish for trade, and is a main fundamental factor supporting price in the market. Crude oil imports also fell 134,000 barrels to 7.5 million barrels, which brings the 4-week average to 7.4 million barrels per day. This is 1.9% below last year for the same timeframe.

In my opinion, crude oil futures have been committed to range bound price action between the $40 and $60 handles. While this range continues, it will be important to watch the smaller timeframe charts for changes in intermediary trends which will cause this market to trade between the high end and low end of its range. With that being said, I am expecting support for crude in the near term while above $51.00, to take us towards $54.00. If price action breaks below $51.00, the next major support will be into the $48.00 area, and I will be expecting the market to then trade higher to test the $55.00 threshold.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-367-7290 ordhussey@rjofutures.com.

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About the author


Dan started his career as an arbitrage clerk in the Euro Dollar pit on the floor of the CME.  After graduating from the University of Notre Dame, he leveraged his computer science background and started his trading career developing both automate and discretionary trading systems.  Dan has spent the last 5 years trading his own account, concentrating primarily in the currency and grains markets.  Most recently he has joined RJO Futures as a Market Strategist.

Sector Focus

Currencies, energies, interest rates, grains, softs, stock indexes, including options and spreads.

Analysis Preference

Dan is a firm believer that the market is a fine dance of technical currents driven by fundamental tides.  He spends his time studying both market participation and technical price tools to determine a well-rounded trading plan, while using the bigger fundamental picture as a final criterion.  

Strengths and Trading Philosophy

Most of Dan’s strategies focus on minimizing risk through execution.  While maintaining diligent position size to account size (leverage) governs the overall risk exposure, Dan believes firmly in bringing trades to a break even point as a main key to success.    


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