Crude Oil Forecast August 4, 2015, Technical Analysis

Light Sweet Crude

The light sweet crude market fell hard during the course of the session on Monday, breaking below the $46 level significantly. With this, the market did in fact reach towards $45, as the market continues to show weakness. This market simply cannot get out of its own way, and therefore we have absolutely no interest in going long, as we believe now the $47 level should be rather resistive. We think that any sign of weakness after a short-term rally should continue to be sold, and that we may be going all the way down to the $42 level given enough time, as it was the most recent low on the longer-term charts. We have no interest in buying, just simply because it is a classic case of trying to “catch a falling knife.”

Brent

The Brent market fell as well, gapping below the $52 level at the open on Monday. With that, the market broke down below the $50 level which of course was supportive, and as a result we feel that this market will continue to go even lower. We think that rallies on short-term charts will offer selling opportunities again and again, because quite frankly the oil markets are simply falling apart at this point in time. There is no way to go long of this market, and quite frankly we have no interest even looking for a buying opportunity and until we get some type of supportive candle on a longer-term chart such as a weekly chart, or perhaps a monthly chart. This market has been broken for quite some time, and we believe that should probably continue going forward.

We believe that the $52 level will now be resistive, especially as there is a cluster going all the way up to the $55 level. In other words, it just simply doesn’t make any sense to go long and we think that “relief rallies” will be just that, relief rallies and not an opportunity to try to pick the bottom of the market at these low levels.