Cycle Trading

Pre-Summary

Oil printed its lowest point on Week 28 and has since begun to recover. This week’s rally has carried price back above the 50-week and 200-week moving averages, providing the first evidence that an Intermediate Cycle Low may be developing. However, additional confirmation is still needed before Week 28 can be labeled as the ICL.

Oil printed its lowest point on Week 28, placing it in the early part of its timing band for an Intermediate Cycle Low. The previous week produced a weekly swing low but stalled at the converging 50-week and 200-week moving averages.

This week, Oil is breaking above both moving averages, providing the evidence that Week 28 is attempting to signal the Intermediate Cycle Low.

However, Oil remains below the declining 10-week moving average, which will likely provide the next important test.

We will use a close above the 10-week moving average to label Week 28 as the Intermediate Cycle Low.

It is equally important to separate the weekly cycle from the weekly trend. Although the Intermediate Cycle Low is attempting to develop, Oil remains in a weekly downtrend. The weekly downtrend will remain intact unless Oil closes above the upper weekly cycle band.

Oil Cycle Study

✓ Week 28: Lowest point printed within the Intermediate Cycle timing band.

✓ Previous Week: Weekly swing low formed at the 50-week and 200-week moving averages.

✓ This Week: Price reclaimed the 50-week and 200-week moving averages, setting up a potential Intermediate Cycle Low.

Next Milestone: A close above the 10-week moving average labels Week 28 as the Intermediate Cycle Low.