What a nice way to start the morning – – crude oil, at long, long last, has broken its support level. Next goal: break the symmetrical triangle by way of the blue trendline beneath. After that, it’s party time.
I guess the whole Greek nonsense has been put on hold (again) until Saturday, just so the angst, tension, and uncertainty can persist. The situation has long passed the point of tragicomedy.
So let us turn our attention instead to crude oil, which ended its firm, steady push lower early this year. Since then, it has been sputtering into a tighter and tighter range. I am, naturally, wanting it to break lower, but there are two levels needed for that: first, the front month needs to slice below the $59.19 level, tinted below in yellow. If it can manage that, the failure of the symmetric triangle (approximately where that red circle is) would be just what the doctor ordered for the downfall to resume.
Even though I’ve been charting for decades, I am still in awe of how some of the simplest methods can be helpful.
Trendlines, which are by definition the simplest drawn object even possible, are a favorite example. Check out crude oil’s front month, shown below. This is an important chart to me, because I have so many energy-related shorts. Oil was surging last night, but look at where it peaked: at precisely (virtually to the penny) the descending trendline, which represents resistance.
Of course, the real “break” I want is a failure of the 56.51 horizontal line. A failure of that support means it’s party time, at long last.