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.
Triple-bearish-on-energy symbol DRIP is the gift that keeps on giving (in addition to ERY). Trade of the year!
My near-obsession with energy stocks continues to save my bearish butt from this otherwise insane cocaine-snorting, heroin-injecting market. Ever since the completely stupid OPEC love-fest ended, market forces (remember those? if you only trade equities this is probably new territory for you………..) were allowed to come back, and crude oil has been moving precisely the direction God Intended……..
I’m disappointed in myself that it took me THIS long to discover that it’s wiser to seek out markets where that 4’3″ white-haired troll doll named Janet Yellen doesn’t have a vested interest in completely propping it up with fake money.
Let’s see the thirties, crude! In the meantime, the entirety of my ETF portfolio is already positioned (and strongly leveraged) in the energy bear market.
“Moments ago”, as Tyler likes to say, the crude oil inventory report came out, and – – much to my relief – -it did not soar (although, weirdly, 30 seconds before the report, it DID soar, and I was wondering if someone had screwed up……….but I guess it was just stop-running). Anyway, the market is still digesting the news, but as of now, we still haven’t really budged since the Big Black Down Day a week ago. Since then, we’ve just been hanging out at $46 or so.
Here we are, on another one of those ostensibly “big days” in which all kinds of geopolitical events are supposed to turn the markets upside down. Meh. If there’s anything consistent about the past few years, it’s that these pre-announced big days turn out to be a big box of wet firecrackers, and the handful of actual market-moving events some along completely by surprise out of nowhere (like the brief, but enjoyable, Trump Dump from a few weeks ago).
Anyway, at least our old friend crude oil is always there to move to and fro with gusto. A key support price level is rapidly approaching, and a failure of that line could cause the energy bear market I’ve been milking to really kick into high gear. It’s nice when global, natural market forces actually overrun the efforts of OPEC to artificially prop up oil into lofty fakeness.
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.