During the night crude oil started a reversal and the only question is, is it a simple bull market correction or will the entire move in June be retraced? Only time will tell but the rally does look like a zigzag so I will remain bearish but be vigilante if a bear trap is shaping up. Gold is still in a rally but oil crashing makes oil become cheaper or cause gold to crash, as any Gold/Oil ratio will adjust itself.
On the daily charts, the 200-day MA has just produced a very small death cross so oil would have to do some fancy footwork to avoid a full-blown death cross.
There are no daily limits in all of the futures contracts I follow which means violent swings can always happen, and if your short oil then you may see some “green” in your oil short positions.
I have a small Forex account where I trade 5-10 oil units depending on how much confidence I have to the downside.
The Gold/Oil ratio is about 24:1 and sooner or later this ratio has to shift making oil cheaper if oil keeps crashing in price. Sooner or later the Gold/Oil ratio will bring the gold price down as well.
If gold blasts up to say $1511, in a fit of panic, then the Gold/Oil ratio could hit a 62:1 ratio. Gold can move $100-$200 easily but I have never seen or recorded any ratio spread that a 62:1 ratio would bring.