The market is down in early trade today currently trading just under the 95.00 area. Key support to watch today is former resistance broken last week between 94.35-94.40. If the October contract can hold above this support today, the near term trend will remain up.
If 93.35-93.40 support is broken, the 10 day moving average at 94.05 will become the next support. A close back under the 10 day average will turn the near term trend back down.
Last week’s 96.00 high is the first area of resistance this week followed by the 200 day moving average at 96.45. A close back above the 200 day average would be further confirmation the market has bottomed.
Hedge funds have been steadily liquidating long positions after accumulating a record high position in crude oil of 458,969 contracts in mid-June as the market topped.
The current speculative long position in crude oil is 317,727 contracts (futures only), down 5,746 from the previous week according to the COT report released on Friday.
Technical Indicators: Moving Average Alignment – Neutral
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bullish
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