Oil has likely floored

It was a pretty wild day in the oil market, with WTIC Oil swinging from an early low of $54.21 to an intra high of $58.98. However, there was renewed weakness across the afternoon, with Oil settling +1.7% @ $56.47. Mid term outlook is for a rally to the low $70s by late spring.


WTIC, daily

WTIC, monthly'2, rainbow

Summary

Clearly, there is no decisive turn on the bigger weekly/monthly cycles, but the daily Oil charts are offering a provisional turn.

If Oil has floored at $53.60, first upside are the low $70s.... which of course is a long way up! A $17/22 bounce is VERY viable.. and would make for a natural retrace across the next 2-4 months.

From there, I am currently of the view that Oil will fall from the 70s...to break new multi-year lows in the 40s... perhaps 30s in the second half of 2015. The problem for the oil bulls is that OPEC are refusing to cut... and after a bounce in early 2015.... the broader downside will likely resume.

WTIC Oil, weekly'2, fib retrace

Oil bulls should be looking for the first blue candle, whether by end year... or in January. That should clarify a sig' bounce to at least 65/70 by early spring.

Regardless of that longer term view, we probably do have a floor/turn.. along with the equity market.


Looking ahead

Thursday has an array of data.. weekly jobs, PMI service sector, leading indicators, phil' fed. If most of those come in at least 'reasonable', it will give the market an excuse to continue climbing into the sp'2020/30s.

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Goodnight from London