The professional investors must profit by anticipating future trends and events rather than chasing old news. This is done by following the invisible hand or message of the market. That message, the simultaneous study of the cycle of accumulation and distribution (trend), the distribution, movement, and participation of leverage, time/cycles, and human behavior void of opinions is defined below:
Trend
A falling trend supported negative trend oscillators since July (chart 1). This down impulse, however, was reversed by a bullish crossover (XO) last week. This is bullish over the short-term.
The bulls control the trend as long as the trend oscillators remain positive.
Chart 1
Leverage
The flow of leverage (red arrow) has defined a bear phase since July (chart 2). Last week's bullish crossover (see trend) failed to reverse this trend. This divergence between price and leverage that defines oil's rally more as a technical bounce than change of trend suggests caution for bulls.
Chart 2
Oil's leverage oscillators, holding above zero since July, also confirm a message of caution for the bulls (chart 3). The up impulse defines the expectation of falling prices until reversed by bullish crossover.
Chart 3
Time/Cycle
The 5-year seasonal cycle defines strength until the second week of April (chart 4). This bullish tendency could frustrate opinion-driven bears trying to force a trade.
Chart 4