Today looks like more of the same. Prices trend early, then reverse or just go sideways. Until we can break out of the recent range on the daily chart, this will likely be how the market continues to operate. Note that prices are trading outside of range support at the moment, so unless we get a rally today that closes back inside of that range, we could see a lot more downward price action.
There are just too many unknowns with Iran, which in turn affects oil prices, and the oil prices affect the entire world economy, including the US. Everything you use and buy is shipped across the world and country using diesel, so the cost of fuel affects everyone around the world. As long as we continue to play games with Iran or any of the other oil producing middle east countries, things are going to be volatile. It would be nice to find an end to the issues plaguing our oil passages in the Strait of Hormuz.
There is an overhead gap on the chart this morning, so prices may attempt to fill that gap at some point. That target would be up at 7541.00. While prices are very mixed at the moment, there is still a very mild downward bias going on while prices are attempting to test the current lows of the day. That means prices could continue to work sideways to down, and if the support holds, prices may reverse. If support gives way, we could see more downward action.
Follow the price action wherever it takes you and expect volatility, so do not make any risky moves with your trades. Stay focused on the chart, follow the rules and be very, very disciplined.
Mack’s Daily Chart with the Envelope Bands/Strategy.