The crude oil market currently shows no signs of bottoming after falling under the 50.00 level last week for the first time since 2009.
The spot February 15 contract lost 4.33 or 8.2% in last week’s trade settling Friday at 48.36.
The market is approaching a key technical support level which is a 16-year trend line on the weekly chart between 45.00-46.00 with the market bottoming out last week at a 46.83 low.
If 45.00-46.00 trend line support holds, it could mark the beginning of a trend turn back higher. But if trend line support doesn’t hold, the 32.40 low from December 2008 will become the next downside price objective.
The COT report released on Friday showed the funds holding a fairly sizable net long futures position estimated at 268,800 contracts, down 3,684 from the previous week.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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