Oil Longs Were Liquidated
Yesterday oil printed one of the more unique profiles, the long liquidation. It suggests a higher time frame participant came into the market hard causing a large directional move which triggered additional order flow as longs were stopped out. The resulting print takes on a lowercase b-shape.
In the context of a larger uptrend this type of profile tends to occur at-or-near an inflection point. In oil’s case we are operating in a long term bearish chart, intermediate term neutral-to-slight-bullish thus we cannot weigh the print the same. However, we can look to see if it induces more sell flow, down through the next distribution of volume. Also, if we trade higher in crude today, we can see if the higher time frame participant, let’s call him Lawrence, defends their position territory, see below:
