After poking its head above the $50 level for the first time since May, West Texas Crude Oil (WTI) is backing off a bit.
Is there more downside ahead?
Currently, Crude Oil is oscillating near its 200-day average, and I am looking for a top in and around this area. Chart resistance is heavy from current prices on up to the $55 region so gains will be tough from here.
Once the current rally ends, I think there is a good chance that WTI takes out key chart support at $42, setting the stage for the ultimate flush in crude oil prices all the way down into the $30’s. In the COT report (Commitment of Traders), commercial hedgers (smart money) are almost as bearish as they were in June 2014, right before the market cracked big time.
Large speculators are as bullish as they were back in 2014. NOT GOOD!
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Twitter: @MarkArbeter
The author may have positions in related securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
