The screenshot above shows the price of oil on a monthly time-frame with our TradeThe9s Sequential Indicator overlaying it.
If you look at the candle ending May 2018, it clearly demonstrates a completed TD Sell Set-Up (marked by the 9 with red arrow). This TD Sell Set-Up also completed with a decently bearish reversal candle which can help validate the sell signal given off by the Tom Demark Sequential Indicator and lend confidence to traders taking on the short-play.
Why do we feel this particular TD Sell Set-Up is potentially very significant?
If you look back to May 2011 and July of 2008, you will find that Oil also topped on TD Sell-Ups for a monthly timeframe. Oil would go on to fall nearly 80% for the remainder of 2008 and 35% in 4 months in 2011.
Will this Monthly 9 have the same effect on the price of oil? (price has already fallen 11% from top to bottom in the short-term)
We feel that if this June monthly candle fails to hold the 200 MA ( currently trading slightly under it) then prices will fall to short-term support at $60 and then likely go down to test the 50 MA somewhere in the neighborhood of 55$. If this is the case, we could see a TD Buy Set-Up count begin... bringing along with it potentially 9 months of downside in prices.
If prices do hold the 200 MA for June and July candles, then look for a long entry on the Countdown Phase of the TD Indicator with the expectation of 13 more months to the upside.
Disclaimer - we currently do not have a position in oil and this isn't financial advice but observation and education for the TD Indicator.
6/5/2018 7:00:00 AMAffiliates