Crude oil inverted head and shoulders, long term bullish breakout

psw11 spot 2016-4-20

Inverted Head and Shoulders Pattern
Around March 31 and April 1 many analysts started talking about the head and shoulders pattern that was forming in oil ETFs such as UCO.  When I read it, I just about rolled laughing, thinking more like we were running into the neckline on the right side of the inverted head and shoulders pattern.  A month later my thoughts were proved to be 100% correct.

It is interesting to note that on the May futures contract there was actually a bearish breakout below the left shoulder.  However, it did not break below the left shoulder on the multicontract chart.  Predictably on 4/1 and 4/2 many bears jumped onto the short side, triggering a 2 day 10% slide.  Which was promptly taken back by the market in the next 2 days.  Those professional analysts sure earned their money on that call as we are now almost $8 off the 4/5 bottom.

It was interesting reading all the posts from the permabears who were again convinced that $20 oil was soon to be had.   Their joy was great but very short lived just as it has mostly been since late January.  I have not seen a single analyst or writer post about the inverted head and shoulders in crude oil or the bullish breakout from the downward channel.

Bullish Breakout from Bearish Channel
After the May contract expiration drove crude oil out of the bearish channel around 3/17/2016, the breakout was confirmed when trend resistance broke again on 4/8/2015.  Again, little or nothing has been said about this.

DeMark Bullish TD Price Flip
Of course those that use DeMark Indicators saw a bullish price flip the week of 2/29/2016.  Over the years DeMark indicators have proven to be fairly reliable.  The Bullish TD Price Flip on the weekly chart was a giant clue that the talk of a head and shoulders pattern forming with more downside ahead in crude was way off base.  The DeMark Bullish TD Price Flip occurs when the week closed above the closing price from 4 weeks earlier while the previous week's close was below the close from the week 4 weeks ahead of it.

There have been multiple very bullish technical indicators in crude oil since February, yet it is practically silent from the mainstream media and professional analysts.