The October 14 crude oil contract which last week traded in volatile 3.00+ intraday ranges has fallen to a new 7-month low in the overnight session.
The contract had been in a trading in a sideways range for nearly 3 weeks before breaking out below 92.50 support today. If the breakout holds, 88.00-89.00 will become the next primary support under the 91.24 spot contract low set in January.
Former daily low support between 92.50-92.68 now becomes the first area of resistance today followed by the 10 day moving average at 94.00. Longer term resistance is the top of the recent trading range between 95.80-96.00.
Similar to natural gas, funds have been selling out existing long positions in the crude oil market.
Friday’s COT report showed funds long 302,564 contracts, down 15,163 from the previous week. Funds were long a record large 458,696 contracts in June as the market topped for the year.
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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