The crude oil market last week fell to the lowest spot price level since July 2009 as it continues to trade in a near free fall.
The January 15 crude oil contract lost 8.03 or 12.1% in last week’s trade settling Friday at 57.81.
The market spiked down to a 56.25 overnight low but is currently trade back toward unchanged. The overnight low is the first area of support followed by 54.00-55.00.
Longer term support and the downside objective for this current downtrend is a trend line support on the weekly chart that is at the 45.00-47.00 level.
If this trend line is reached and holds as support, the market will remain in bullish series of higher highs and higher lows dating back to 1998.
Any upside strength should continue to be heavily sold with the current overnight high of 58.73 being the first area of resistance. Longer term resistance is the 10 day moving average currently at 63.00.
Friday’s Commitment of Trader’s report showed the funds long 261,776 contracts (futures only), down 3,220 from the previous week. It is interesting to note how the funds have continued to hold a fairly large long position in the crude oil market as it collapses to multi-year lows.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index – Bearish
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