in the beginning

This document is an analysis of theoil price crash from July to August 2021.

It summarizes the thought process fromthe first sign of a trend reversal to conviction.

This article is intended for.

I lost a lot of money in the oil trade.
The market is hard to read and easily tossed around.
I want to be able to win in a volatile market.
They want simple, reproducible strategies.

Below I have summarized the strategic preparation and thought process leading up to the oil futures crash.

Indicator appearing in this article,Super MacdWith some understanding of the characteristics of

Reading the book will further enhance your understanding.

We hope thatthis documentwill help you to improve your performance.

Rationale 1: 5-day divergence

After July 9

5-day time lag

Super Macd sell divergence sign confirmed.

Even visually, the 5-day MACD histogram is diverging.

From this point on, we predicted that a ceiling in crude oil would be near soon.

Fundamental and sentiment analysis at the time showed that many traders had high expectations for further upside.

I thought that if and when the big sellers turned to sell, it would be a pretty big sell-off.

Fundamentals in July were still under considerable buying pressure, partly due to the uncertainty of the OPEC-plus resolution.

At the same time, sentiment analysis on social networking sites and Youtube showed that some prominent traders were of the opinion that crude oil futures would continue to hit $100.

Rationale 2: Change in 5-day EMA5 / Daily Elliott 5-wave

From July 2 to 5, the slope of the 5-day EMA5 paralleled from an upward curve. Then it showed a downward movement.

Furthermore, the daily Elliott wave count shows that the high of the third wave was exceeded in June and a fourth wave has already been formed, so

If we see an edging high in July, we can view that as a 5th wave.

Please see the rest of this article in the e-book.

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