WTI crude nears the October intraday high
The oddest thing about the oil chart are the shrinking candles.
As the price of crude rises, the size of the bars should rise if the same level of volatility is maintained. Instead, the moves are shrinking in absolute dollar terms and also in percentage terms.
It's a sign of how the emotion and excitement has been slowly drawn out of the oil market.
Even something like a new high on Tuesday underscores it. In the past that might have led to some shorts getting squeezed out and a big push higher. Instead, the market stalled and has been stuck around $50.35.
There's also the narrowing channel but the big feature is the October high, which is less than 60-cents away.
Unless the US dollar finds its legs in the next 18 hours or there's a huge surprise bid in the EIA supply data tomorrow, I just don't see how that level can hold.
But I think the shorts have been squeezed out and whether it's $50 or $60, oil will move sideways at some point and volatility will continue to fall. Meanwhile, the market is still massively oversupplied.
It's not the time to short yet, but it's coming.
