Crude Oil Correction Continues: Are $90, $86 Next?

See It Market contributors have been all over the move lower in Crude Oil (WTIC) that has unfolded over since CL established it’s late August swing high at 112.24/bbl (check out two of the latest, from 11/5 here and from 11/11 over here).  Now after bouncing off mid-last week’s swing low at 93.07 into a rising wedge to as high as 95.38 yesterday, Crude is breaking down once again, printing 93.32 last.

In the pieces linked above, Andy Nyquist and I both note the importance of $92 support in Crude Oil’s short-term context. I even go so far as to point out the trend line passing through the $90-$92 level right now has only broken on a decisive basis once in the last 12 years: during the end of the world.  Crude breaking down through this line wouldn’t qualify as a harbinger of the apocalypse in the current market environment.  However, There’s no denying a snap below that level constitutes a major breakdown that begs some major questions about the health of Oil’s cyclical up-trend. In fact, below $89.79 constitutes a formal bear market at -20% off the $112.24 high.

This secondary downtrend underway since $112.24 has thrown off numerous measured moves that have created structured support, first at $90/bbl and about 5% further below $86/bbl, as seen below.

Crude Oil Correction (CL) – Daily: Potential Measured Moves to $93, $90, and $86

Crude Oil Correction


Twitter: @andrewunknown and @seeitmarket

Author holds no exposure to securities mentioned at the time of publication.

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

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