2min chart of Brent – 19.12.2016

I want to write about Today – a boring and average day. No big data release or news to expect. I like to give more importance to technical analysis in this “slow” market environment.

The volatility calmed down a little after two weeks of swings. With Christmas and the-end-of-year holidays, we can expect lower volume in coming weeks. I think that some indicators are more powerful than other in this environment:

There were a lot of  bounces and breakdowns near today’s pivot and supports. The chart above illustrates how important those levels can be from an intra-day perspective 

On the 2-min chart above you can see (red arrow) some nice short opportunities.

For S1: the market was trending lower and this was the second time this level was tested. First it broke and quickly moved back up. But the price failed to really bounce and there was no volume to the upside. I opened a short the second passage below the support.

For S2: you have a similar situation. Prevalent trend: down. First support broke. Market quickly test price below S2 before coming back up. No serious bounce up and quick break of S2.

I don’t know if it is linked to algorithm or something else. But this is a recurrent pattern for support test in the oil market:

  • Quick test below support
  • Come back up , consolidation
  • Big leg down