The January 15 crude oil contract spiked down to a new 5 ½ year low of 53.60 in early trade on Tuesday but was able to rally back toward unchanged by the close settling at 55.93, up 2 ticks.
The primary trend remains down with weekly chart trend line support between 45.00-47.00 remaining the downside price objective for this current sell off. The next level of support under Tuesday’s 53.90 is between 50.00-50.50.
The one-sided slide lower in the crude oil market that picked up momentum in late-November is a collapse not seen since 2008 when the spot market bottomed out at a 32.40 low.
It took nearly 12 weeks for the market to finally bottom in 2008 as is typically the case on long term crude oil lows. It would probably be better to let the market stabilize for several weeks before aggressively adding long positions.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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