Here’s a video from Adam Hewison presenting a method of combining several individual indicators to first identify a range and then to trade it successfully:
The crude oil market has been a disappointment to a lot of traders as has remained in a broad trading range for the past 18 months. But the current trading range will eventually be broken and the market will move in the direction of the breakout.
While INO’s long-term indicator, the monthly “Trade Triangle” continues to be positive, short-term “Trade Triangles” are indicating weakness. With a score of -60 for February crude oil, we expect that this market will be range bound in the short term.
For the past 18 months the best way to trade crude oil has been with the use of an oscillator indicator. The one presented in today’s video clearly shows you where the lows and highs are coming in and indicates a potential market bounce from current levels.
My own thought is that the trading range will be resolved to the downside. Part of that is the general ‘high risk’ state of the market due to extremely positive sentiment. The other is that there are some signs of froth in the energy sector. Since I wrote about this last month, there has been a tiny bit of selling in this sector but the level of interest is still very elevated and commensurate with previous tops than with a continuation of trend or a capitulation whichs marks major bottom.