Is crude oil on its way to much lower prices? A year ago, crude started a bear market as it broke below multi-year support, taking it below a line of support that has been in play for the past 7 years.
After a 50% decline, a counter trend really took crude to the underside of resistance and its 200-day moving average (highlighted above), where it stopped on a dime. Since hitting resistance, crude oil has declined over 15% in the past month.
Now crude is testing lows established earlier this year. Is a triple bottom in play or is a further breakdown about to take place?
The Support Message
If crude doesn’t hold at support, would it be sending a supply-demand message; or is it suggesting that something bigger is taking place on a macro basis?
Humbly I'm of the opinion that crude oil is one of the more important commodities on the planet and what it does from here will say something about the global economy, which could then ripple into the stock market.