Crude Close But Not Yet near Meaningful Bottom
From my view, we are getting close but are just not yet near what could be a meaningful multi-week or month bottom in crude. With current sentiment and oversold readings we could in the short term see some spectacular multi day or even week long bounces worth playing, however, longer term support for crude could reside at prices about 10-15% lower.
The primary rationale for this is what i believe is a confluence of targets that align in the $49-$52 range in crude.
Confluence of Targets:
1. 16 yr rising trend-line @ $50-51
2. .764 retrace of the 08' low to 11' high @ ~$52
3. Descending wedge breakdown PO target @ ~$49-50
Weekly RSI is down around 12.3, one of lowest readings over the past 30 years. With that we may see a bottoming of the RSI occurring this month with a new price low and higher RSI reading occurring after the new year. Possibly similar to the 2008 collapse where weekly RSI bottomed in Nov-08 with price bottoming in Jan-09 at much lower levels.
The primary rationale for this is what i believe is a confluence of targets that align in the $49-$52 range in crude.
Confluence of Targets:
1. 16 yr rising trend-line @ $50-51
2. .764 retrace of the 08' low to 11' high @ ~$52
3. Descending wedge breakdown PO target @ ~$49-50
Weekly RSI is down around 12.3, one of lowest readings over the past 30 years. With that we may see a bottoming of the RSI occurring this month with a new price low and higher RSI reading occurring after the new year. Possibly similar to the 2008 collapse where weekly RSI bottomed in Nov-08 with price bottoming in Jan-09 at much lower levels.