Sorry mr Greenspan, you are wrong about oil
There’s been a lot of talking lately about commodities, specially Gold and Oil…
Traders and investors are always looking at these two commodities for clues about the shape of the world economy, US Dollar, etc.
Read this if you want to know more about Gold & Oil and why they are important for Forex traders.
Yesterday an article on Bloomberg caught my eye about what Greenspan thinks about oil, and its current levels. Greenspan suggested that oil prices have probably bottomed out at about $40 per barrel.
In his own words: “It’s hard for me to imagine it going very much lower, but it could…”
I dont know my friends, but every time some personality comes up expressing his or her views about any instrument (defending certain levels)… it makes me think someone whats us to believe it will turn around…
Do you get the same feeling?
I remember back in 2008ish, when warren buffet came up saying we was going to buy GE stocks, and the stock fell more than 50% afterwards…
Technically speaking… Oil suggests it will continue to fall. They say technical analysis includes all information available for traders, analysts and investors! And it suggests, that oil will continue to fall.
Look at this chart:
Its very clear that it is trading in a bearish condition
We have absolutely nothing to make us believe that the trend has changed
It was rejected from an important resistance zone
It is like to continue its way down, at least until it hits the next support level
Yes I know, its been retracing in the last couple of days, but that’s what it is, just a small retracement.
I’m sorry mr. Greenspan! but we’ll see Oil at least around 28ish again…
I consider myself a pure technician. Its not that I don’t care about fundamental analysis, I follow it, its just that all my trading decisions are based on technical analysis.
Fundamental analysis tells you why is the market moving like it moving, technical analysis will tell you what the market is likely to do.
Let me know your thoughts.