After reaching all-time highs earlier this year, Canada’s TSX Index has dropped to around the 15,250 level, as shown on the following Monthly chart…an important long-term major support/resistance level.
Crude Oil has fallen a massive 60% since mid-June 2014, as shown on the following graph.
Price today (Wednesday) fell below 43.50, which I identified in my post of June 3rd as a major support level, and closed at 42.53, as shown on the Daily chart below.
Increasing volumes are either signalling continued weakness ahead, or some buying stepping in between this level and 50.00. Since another bearish moving average Death Cross has formed recently, the first scenario may be favoured in the near term.
From the Monthly chart below of the S&P 500 Index (SPX), we could see it rally another 100 points, or so, to around 2525, before it stalls or a meaningful pullback occurs.
That price level would surpass a 200% external Fibonacci level at 2473.34 and intersect with a +1 standard deviation of a long-term regression channel from the 2009 lows.
I learned a valuable lesson a few years ago in my move cross-country. Since I was in the process of a major downsizing following the loss of my husband several years before that, I was finding it difficult to part with a number of items that we’d accumulated over the years…as well as still grieving his passing and the passing of our two pussycats in the past several years…my “family” of four had been reduced to a family of one (me). However, I had no choice…I had to be rigorous in my approach to the move and establishing my new life.
Then I remembered something I’d learned in the past year…something that can be of benefit to each of us…that was to simply think of items that I had accumulated as items that were only meant to be borrowed and not meant to be kept for life…this same principle can also be applied to everyone we meet (and are a part of) throughout our life (friends, loved ones, spouses, partners, children, family members, pets, etc.).
The long-term chart below of Crude Oil shows a potential reverse Head & Shoulders pattern that has formed since the end of 2014, with a high-level tug-of-war occurring above the light green shaded area (just above a 78.6% Fibonacci retracement level and within the upper half of a declining channel) at 43.50 since mid-2016.
At the moment, we see major indecision around the 50.00 level (50 & 200-day moving averages).
A breakout and hold above the reverse H&S pattern neckline around 57.00 would be significant, inasmuch as we see a confluence of major Fibonacci, channel, and price resistance at that level. I’d call that Oil’s sweet spot.