The bulls in the crude oil market that continued in the first quarter have helped the price return to the central axis level we defined. With the emergence of high pressure and the small deviation between US stocks and stock indexes, we expect that it will be more difficult for oil prices to go up. For low buy/long investments, now may be the time to at least partially lock in profits.
At the end of last year and the beginning of this year, we introduced the composition of crude oil price range: above 95/100 is the level of selling crude oil reserves by the US government (Biden made clear), while below 70 US dollars is the level of buying back crude oil reserves.
The 84 line in the middle of the two is defined as the central axis because of the obvious change of hands. Under the big shock market, the operation is unpretentious, buying at a low level and shorting at a high level. The intermediate level can be used as a reference for reducing positions or shipping. Before the American election, it was difficult to make a real breakthrough in the absence of black swans in the market.
Nowadays, the oil price is already above the central axis level, and another factor that we think can be considered for safety comes from the continuous adjustment of NVIDIA, the star stock, which even has the preliminary meaning of double top on the Japanese line. Although the U.S. stock index as a whole has maintained a good momentum, it is still worth preparing for this deviation in advance. We should know that crude oil has maintained a clear positive correlation with US stocks for a long time, but there may be some discrepancy in time.
In addition, the recent situation of New money, which we talked about last week, does not support the continuous triumph of oil prices: the varieties represented by BTC have been fluctuating continuously for some time, and there are signs of short-term kinetic energy weakening after the continuous rise of gold. At present, when the general direction of risky assets converges, it is reasonable for the market to have a certain degree of callback.
So do you need to start shorting crude oil backhand immediately? Judging from the current price pattern, it may be too early, and there is no clear stop-loss reference, so you can wait and see the development of the market for a while after closing the position. If US stocks start to make up for losses, it will be a relatively reliable short indicator; On the contrary, if Nvidia's head shape does not break down and eventually changes to a high level, it means that the oil price may slowly move closer to the upward track, and shorting will inevitably have better cost performance.
In a word, before the end of this year, we can continue to adopt the strategy of high throwing and low sucking in a large range for crude oil. At the price level relative to the central axis, it can be used as a rest period to see more and move less. When there is no ideal entry price, it is also a good choice to choose other varieties.
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