Crude Oil and Bonds – Talk Amongst Yourselves

The ratio of Crude oil ($CL_F, $USO) to Treasuries ($TLT) has a lot to say. The chart below the tells the story. There is a lot going on so lets break it done. First the price is heading back toward the Lower Median line of the bullish (green ) Andrew’s Pitchfork and away from the bearish one. A point in favor of Crude oil. The Fibonacci’ show that the pullback that occurred at the 50% retracement has now retraces 38.2% of that bounce and showing sings of leveling. perhaps a pause. The Relative Strength Index (RSI) is leveling at the mid line and the Moving Average Convergence Divergence indicator (MACD) has been trending higher and is now positive and still growing. Another set of positives for Crude Oil. A move up to the ratio of 0.81, the 50% retracement, seems likely, and a push through has both the Pitchfork and the 61.8% retracement at 0.85. For the time being a continued bullish bias towards Crude Oil and away from Bonds.

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