Week 20 (17th May-23rd May): Weekly Moo River Watch on Wealth (oil and VIX)

Nymex (JULY 09)

4 hourly

At 8am on 13th May, oil finished its recent bull run as it broke down from a top price of 60.68 dollars.

It now has correlated downstream moo rivers on price and momentum indicators, also showing signs of acceleration in the pace of the downturn as well.

But with rsi also hitting 30, I am wondering whether we are going to see a sharp bounce based on bearish momentums to create one super bearish divergence between momentum and price.

Oil seems to suggest a weak week opening, following by a sharp rally back.

Hourly

We have hit the lowerbank on price in the downstream moo river. A rise on Monday towards 59 dollars will be sold by aggressive bears. There is a W on elder ray, rsi is already under 30.

There is conflict between 4 hourly and hourly, so neither will be able to generate a significant rally either way in the coming week, though once a surprising spike or dive taking place, it might induce a counter-reaction in the opposite way.

Oil seems to be headed towards an up and down or down and up week.


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VIX (May 09)

Daily

We have come down along the lower bollinger slope at a healthy bearish angle since the end of April and now it seems that we are stuck in a flat bearbull zone, a rectangle. In a trending market, a rectangle is a continuation pattern. While the market dithers between 30 and 34, the momentum indicators are trying to bend up and rebel. Rectangles are bear market rallies, which give false hope to the bulls.

Looking at the long-term chart on Yahoo finance, it is almost like looking at the mirror copy of last year's stock market, surely the most naturaly course is for the VIX to return to its norm range between 10 and 30.

Hourly

Monday is really important for VIX, an early rise there will falsify the possiblity of a reveral towards 30 again.

On the hourly rsi, it seems to have hit the upperbank once on Friday and has the potential to shape up an upperbank rejection M there, which will take VIX quite sigificantly.

Monday seems to be one of those deciding day again.