Coach Mark here.

A very interesting technical battle is occurring in oil right now. You have cleared moving averages on most time frames but still have the falling 20-monthly moving average acting as a potential resistance area this month. It is quite the battle right now.

In my Hard 14 course I created at Tackle Trading I discussed the concept of gravitational pull. It is one of the 3 P’s in moving averages (Pockets and Pinch being the other two). The 20-monthly was untested heading into the month of March and in my moving average theory can act as a weight on the price of oil in the short-term. The more times it pushes through this weight the higher the chance of a breakout.

Once you clear this “weight” and no longer have moving averages acting as resistance you enter “clear air.” We have seen in multiple assets how fast price can appreciate once you enter clear air as there are no longer some of the constraining mechanisms from an algo vantage point on price.

Is oil the next to take off? We shall see but the current technical battle is a fascinating one with ramifications far beyond the price oil itself (i.e. inflation).

Have a fantastic Wednesday!

Oil Futures (/CL)

When things enter “clear air” in the last few months we have seen pretty raid price appreciation at times. Is oil next? the falling 20-monthly is the last line of moving average resistance on time frames.

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