The moment of truth for crude oil's near-term direction is nigh, as the price structure has broken beneath its Nov.-Jan. up trend line, now in the vicinity of $51.50. That trend line was violated Tuesday morning, but has not yet been sustained.
Where are the sellers under that support line?
So far, some stop-loss selling has likely unfolded, but oil has not followed through to the downside.
If oil does begin to follow through to the downside, then it will look toward a test of much more important support at $50.00-$49.00.
Conversely, oil's ability to climb and sustain above $51.50 will be an initial indication that the correction off of the Jan. 3 high at $55.24 may have ended at Tuesday's low.