Crude Oil Forecast August 12, 2015, Technical Analysis

Light Sweet Crude

The light sweet crude market initially tried to rally during the course of the day on Tuesday, but found enough resistance above the $45 level to turn things back around and plow even lower. We have broken below the $43 level, and we feel that the markets are looking for the $42 level given enough time. With this, it’s only a matter time before this market tries to find some type of support. The $42 level previously was massively supportive, so it will be interesting to see what happens next. After all, the $42 level caused this market to bounce all the way to the $60 handle last time.

At this point time though, we believe you cannot buy this market, and therefore we look to sell rallies when they appear. We will look to short-term charts in order to take advantage of them, and will sell on the first signs of resistance or exhaustion as the trend is so heavily ensconced. However, we will be paying attention to the longer-term charts in order to get signals for potential trend reversals.

Brent

The Brent markets initially tried to rally as well, but they found quite a bit of resistance at the $51 handle. We turned back around and broke below the $50 level as a sign of real weakness. With this, the market looks like it is trying to break down a little bit from here, but at this point in time you need to see rallies in order to sell. After all, this is a market that has been falling drastically for some time now, and you have to start asking questions along the lines of who’s exactly left to sell this market?

Looking at this market, we don’t have any interest in buying but we are going to pay attention to the longer-term charts in this particular market as well, because the two crude oil markets we follow do tend to follow each other over the longer term. With this, we are sellers again and again until told that differently on longer-term charts.