Crude Oil Forecast January 8, 2016, Technical Analysis

Light Sweet Crude

The light sweet crude market fell during the day on Thursday initially, falling as far as $32 before was all said and done. However, we bounced enough to form a nice-looking hammer, and with that it appears that the buyers could get involved in the short-term, but having said that we are most certainly still in a very negative market, and will simply wait for resistive candles above in order to start selling yet again. On the other hand, if we broke down below the $32 level, the market should then reach towards the $30 level which is the next large, round, psychologically significant number. Ultimately, there is no way that we would buying this contract at this point in time, as we believe that the sellers have more than enough influence in this market to continue to drive price down.

 Brent

Brent markets are almost identical going forward, and as a result it appears that the sellers are going to be very active in this market as well. Given enough time, the markets should continue to sell off, but we may be a bit overextended at this point in time. That overextension will be short-lived though, and we simply wait for resistive candle above in order to continue the longer-term downtrend. We have no interest in buying, and we also recognize that in this market we should be targeting the $30 level as well. After all, the $30 level is a nice large round number, and that seems to be what markets are attracted to over the longer term anyway.

Keep in mind that today is the jobs number and the United States, and it will greatly influence what happens with the US dollar. If it strengthens, that could facilitate a move lower much quicker than the charts may indicate. However, the matter what happens we have no interest whatsoever in buying this particular contract. It is a contract that seems to be falling apart even after the massive move lower that we’ve seen over the last several months.