This is an interesting chart because the U.S. government inventory data this morning showed an unexpected rise in crude oil inventory. The price of crude sold off powerfully. However, the selling only lasted an hour, and crude oil prices have been rising steadily since, as shown on the 15 minute chart on the left. Unless some geopolitical or other event occurs to drive demand lower, it appears that the price of crude oil has bottomed. Prices have been trading within a fairly tight trading range for nearly two weeks!Once a firm bottom has formed in any commodity, I change my focus from selling on rallies, to a strategy of buying on dips. This changing of the guard between a selling focus to a buying focus is the market psychology that causes consolidation trading such as we're seeing now on the daily chart for crude oil (see below). Note that the Klinger Volume indicator (green, bottom panel) is showing stronger and stronger buying, even though prices are relatively flat!
