CRUDE down first before all elseA few simple observations that tell of Crude falling over, despite a previous week of strong bullish price movement from OPEC cuts announcements.
Weekly chart had crude price break above the 55EMA strongly the previous week with a marubozu like candlestick. However, not only did it failed resistance at 94 (dark green line); it broke back down in failure of the weekly 55EMA (white line).
Weekly candlestick formed a Dark Cloud Cover, fully qualified (unlike the SPY. Read about the Dark Cloud Cover candlestick pattern here . This candlestick pattern does not happen often, but is significant as it tells a very logical underlying issue. The gap up is an exhaustion spike, then the downward momentum to more than half of the previous bullish body underscores the overwhelming of the bulls and the victory of the bears. A follow through down candle seals it.
To break the current TD Sequential Setup, the incoming week must close way below 79. Oddly enough, to change the primary trend in the daily chart to a bearish trend, price has to close below 79. Coincidence? Maybe, but 79 IS the critical support now.
The daily chart (right) has its own failures too. We see a clear breakdown failure of the daily 55EMA, coincidentally about a similar level as the weekly 55EMA (white line). With a retest failure just this week, it ended with a nice large red candle that engulfed the previous day's test of the 55EMA. Here, technical indicators all show more downside to come.
In like with all of these, the expected surge of the USD (recently posted and linked below) over the next few weeks; it appears that crude is about to tank to 70-75. Previously projected a downside target of 70, might have to readjust closer to 75, as conditions continue to develop and evolve.
Crude appears bearish (again) in the short term.
