Some thoughts about Crude oil and volume breakdown.

Image explanation:
Charting tool is MarketDelta
60 min chart, from July 5 – Aug 14.
Below is Volume breakdown
Right is volume traded per price level, data from 2009

 

 

If you only look at the chart, it´s quite easy to see the levels that have been visited, but it´s hard to see with what force the levels has been tested. With Volume breakdown you have a pretty good feel for how easy or hard it was for either part to move the price.

I go through my thoughts by the numbers written on the picture above.

1) 86 has shown quite good resistance and had been tested three times before, with quite some strength on one occation. On Aug 13 the bulls tried really hard but the bears fought hard and managed to hold on pretty good.

2) The bulls didn´t gave up and pushed with good volume through the barriers and the bears finally had to give up. After this day, it didn´t take much volume to lift the price a couple of points.

3) Bulls are trying to push the price above 93, but the bears shows to be very strong here (Level had been tested late June and was rejected). When the bulls has no more strength, it´s easy for the bears to push the price lower, but not that far.

4) Bulls that initated the move (2) is still strong here at 87-88 and even with lots of bearish volume, the bears is not able to push below 87.

5) Another try to push below 87, but the bulls is strong down here.

6) Until now, the price seems to be fair between bulls are bears and there not a lot of volume traded. The bulls have found a good price around 87 and starts to push aggresively again, but don´t managed to push above 92.

7) Two more pushes and 93 is broken. Now the bears won´t let them by 95, which is key support from now on.

8) Fair price between bulls and bears, not much volume traded here.

If we compare what happened between 5 and 6, where bulls were looking for a good price to start lifting again, is it possible that the bears are thinking the same thing with 95 level?
I will look for passive selling from the bears at 95 level, and when the T&S is all red and no strong bulls are in sight, I´ll be there..

/J