On the above 3-day chart Crude oil has enjoyed a massive 400% rally since the buy signal in April 2020. A number of reasons now exist to be bearish, very bearish. This should really be the start of peak inflation for the moment.
So why bearish?
1) The ‘great sell’ signal with 90% probability.
2) Double top bearish divergence. RSI prints a lower high on the price action double top (pink line).
3) Price action support breakout.
Is it possible price action continues to rally? Absolutely. A back test of support to confirm resistance is possible.
Is it probable? No.
Be risk on folks.
ww
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Wow, 10% drop. Not a peep in the media. Inflation has certainly peaked for the moment. Why has fuel at the pump not dropped 10%?
Look for support around $88
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Currently price action has corrected around 25%. A lot of messages and questions along the lines of:
“You think oil goes back to $100+?”
“Inflation is going to get a lot worse oil will go up”
On the 2-week chart below here what I see:
1) A confirmed head and shoulders pattern with $50 target.
2) The 10-week SMA has crossed down the 21-week SMA (hence the red area). Look left. On average those red periods last 1-2 years.
I don’t know how or why the calls for higher commodity prices but from my perspective that was 2022.
Ww
2-week chart
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Look for a backtest of past support around 75-76 as resistance before the continuation to 50.
2-week chart
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The backtest mentioned above has now confirmed. Not changed the drawing above now below. 45 dollars next stop.