US oil (WTI) pulled back last week, an idea I discussed in a YouTube video two weeks ago.
The idea was to watch for WTI shorts on a break back below $83.30, as that would suggest a fakeout above the long-standing range highs.
I also shared this idea with Daily Price Action members several times before the breakdown.
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Here’s one such chart I posted in our trading group just before oil broke down:
I even gave members an illustration of what WTI needed to do to confirm the fakeout and potentially break the June trend line.
WTI broke below $83.30 shortly after posting this idea and subsequently dropped over 5%.
We also saw WTI oil break below the June trend line, so despite the consolidation since August 16th, I favor looking for shorts on strength.
One second-chance opportunity could materialize from the recent intraday bearish flag that has developed since last week’s low.
Again, WTI is trading below the $83.30 range highs, so I favor looking for shorts here.
A sustained break below the $80 region would suggest further weakness, and a break below $78.80 would confirm the bearish reversal pattern.
My near-term target for oil is the long-running confluence of support at $74.
Alternatively, a sustained break above $81 and $83.30 would negate the bearish idea.
