Crude getting ready for the return of the bull ?

We have witnessed crude oil falling from its high of USD 147 to its rccent low of USD 39, all within a short period of 4 months. While all the fundamental analysts would tell us that the current gloomy global market situation would have killed the demand side of the story, thus crude oil price would be unable to go higher.

But when we take a look at the CLJ9 daily chart, the picture seems to tell us otherwise. While the most significant "what'w wrong with this picture" item that jumps forth in our face will be while prices have been falling to new lows, the MACD indicator has been rising higher and higher (as marked out in the 2nd and 3rd panel of the chart). This is a classical bullish divergence which if play out, usually is telling us that this market is about to blow to a dramatic high level.

I note that this market has been side waying since late December last year and this is being confirmed by a falling ADX which is now at a lowly 14's. When ADX is below its 20 signal level, it is read as there is no trend in the market.

One item that causes much excitment would be the squeezing/tightening Bollinger Band found at the first panel. Whenever the BBand squeezes, it usually forewarn us that this market may explode soon.

I am bullish biased about this market because the MACD is positive and rising towards its own zero signal line. But I would not take the crossover as a confirmation of the return of the bull but I would see that prices close above the 2 top horizontal line marked out its recent high or a rising D+ rising above the D-'s prior highs as a confirmation.

Meanwhile you should sit tight and watch this market closely for a profitable trade.