I have blogged on the similarities between past oil bottoms and today’s. https://www.valuetrend.ca/history-may-show-us-when-to-buy-oil/
Thus far, this year’s pattern on oil seems to be very similar to that of 2008-9’s. WTI’s bottom in 2009 was characterized by a complex bottom, followed by a rally, followed by a consolidation. The chart below shows us that it was about a 6 month consolidation period before the real “meat” of the new uptrend happened.
The chart below is the current view of WTI’s bottoming process. Note the similar time frames – both 2009’s bottom and todays bottoming process took place over the winter. If WTI is to follow a similar pattern to that of 2009’s, we should expect to see some sideways consolidation over the next 1-2 months. Such a consolidation may lead us into a similar breakout as happened in the spring of 2009. While the 2009 breakout occurred in early May, you can see that WTI had already consolidated since March. My traders intuition – which I will admit is a less quantitative way of looking at things – is telling me that we may see a similar pattern this time around. Such a consolidation may hold WTI between $55-$60 before a breakout in June or July, should the patterns of 2009 repeat.
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