If you have a yen to short oil, consider its chart perspectives first - and reconsider that yen too

Oil had another good day, as I commented earlier during the market session. I know that I've expressed skepticism as to whether oil gets right up to $85, but have acknowledge that's what the P&F chart was showing as the bullish objective, and it's also the level of the Bollinger Band midline on the monthly chart (third chart below). Once it got to my more conservative target, I did TMAR, but that doesn't mean I am shorting it either! Depending on your trading style, you may have gotten back in after oil reasserted itself following that fakeout that looked like a trigger day after meeting my target (or may have stayed in because it didn't go into a reversal pattern at that point). I believe it's doing a valiant 5th wave movement right now, so I still would expect a consolidation or pullback, or more. But let's take a more detailed look on the charts. On the daily chart, you can see that I've got Fibonacci levels just slightly higher, that oil will tap if this wave isn't quite finished. StochRSI on the daily chart is showing that bearish divergence, but the other indicators have not rolled over yet. We haven't seen a trigger day since that fakeout drop, let along a reversal pattern. On the weekly, that's an interesting touch up to the 50-week MA which just moved under the 200-week MA - I don't know that a bearish cross like that "counts" if it's on the weekly, although it does pop off the chart to me. Still, that StochRSI on the weekly is still pumping strong.

Most interesting to me is that oil has pushed above the lower channel trendline on my monthly chart. Maybe that does presage something more interesting down the road after all! But for now, the level of $85 or even $90 ($90 being a 50% retracement to the peak) could still be in order, if oil isn't turned back sooner by resistance at its 50-month MA or that MA situation on the weekly chart, along with the daily chart's Fibonacci levels. You can also look at the Fibonacci levels and narrower channel trendline that I posted with my monthly chart, in this post
6-way look at whether oil can sustain its rally from here (posted here 6/6/09), and see that oil's pushing higher is also returning to test from the underside some key levels (.618 to the monthly lows in the late 1990's and early 2000's) that, having been broken, could become resistance. Now, I am not posting all this in order to encourage anyone to start shorting oil from here, just pointing out reasons to remain skeptical whether oil does manage to barrel up to $85/$90. So, if wanting to short oil, keep an eye on in case it does fail before getting there. Or if it does defy gravity and float up there, then what? If it turns out that it's only a B wave after all, then it can provide a nicer, higher perch for a swing trade short in oil.

Meantime, speaking of shorting, I mentioned in another post recently that I've grown concerned whether the yen will indeed snap up out of what could be a leading diagonal pattern in order to get to new highs such as $125 or $135 or so ... that instead, the recent upswings may have been simply an ABC zigzag for either a wave B or a wave 2, pointing the yen to significantly lower levels soon. So the bottom two charts are daily and weekly charts of the yen. If it loses $98.84, then I've got one projection to $93, but if it also loses $90.41 then I've got another to $83. There are ETF's that track the yen, both short and long (and options of course). Conversely, if the yen breaks the spell of its own bearish cross (50 dma under 200 dma) and pushes back above its 200 dma, then maybe it can reassert a bullish picture - but it just looks like that must happen soon, to stave off the more bearish view.

Speaking of price projections for it, I checked the default P&F for the yen at Stockcharts.com and find that it already adopted a bearish cast. Although it noted a "low pole reversal" on May 21 as an alert, it still shows a bearish projection identified at just above $82. Hmm ... for those who are just in the mood to be shorting something, maybe this is a better vehicle for that. If you don't like placing a stop loss for that at the most recent swing high of $106.53 in $XJY, you can place one closer by at the 200 dma or 20 dma. (If the yen gets above the Bollinger Band (20,2) midline, it would probably also be breaking above minor trendline resistance as well). Above those levels I'd get interested in the bullish long trade for the yen again, but otherwise I'm in the selling camp at this point. Confirmation should come if and when it falls under $98.84 at which point I would expect more downside momentum.