Will this Crude Oil Rally hold?

Crude has finally reversed higher to recover some of its recent losses, and is now showing clear evidence of a new Daily Cycle (DC) and Crude Oil Rally.  There are early signs of a new Investor Cycle (IC) as well.

Midweek, Crude bottomed on day 44 before reversing sharply higher and punching through the declining trend-line.  And when it closed above the 10 day moving average, Crude confirmed that it is in the early stages of a new Daily Cycle.  From this point forward, Crude’s performance will depend on its Investor Cycle and the bear market as a whole.

(Note: Chart is from the weekend post.  Crude is approaching my first mini target at $44 on Tuesday)

In terms of sentiment, there was enough of a selloff to suggest that an ICL occurred.  Even though pessimism did not drop to the level of the previous 2 bear market ICLs, it was more than adequate for an ICL, especially with the weekly Cycle extended beyond its normal timing band.

At the very least, Crude has seen a DCL, so we should expect at least 1-2 weeks of upside.  Eventually however, given that Crude is in a bear market with a series of lower ICs in play, all paths should lead lower.  And that should continue for some time to come.

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Bob.