Crude Oil Forecast November 13, 2015, Technical Analysis

Light Sweet Crude

The light sweet crude market fell during the course of the session on Thursday, breaking below the $42.50 level. That level was massive support recently as we bounced from there and now that we have made a “lower low”, it appears that the market is going to continue to go lower from here. In fact, we believe that the $40 level below will be the target as it is a large, round, psychologically significant number. Also, we bounced from there in late August, so it should have a bit of “market memory” attached to it. Ultimately, we look to sell short-term rallies as is market will most certainly continue to show quite a bit of negativity. However, it will also be choppy as the markets continue to decide about the longer-term future of the crude oil markets. At this point though, you certainly cannot buy this commodity.

Brent

Brent markets have already broken down previously, and as a result we are almost all the way down to the target of $44 that we had mentioned recently. With this, the market now needs to decide whether or not it can break down below there. However, a move below the $44 level could be a bit of a harbinger as to what happens at $40 in the light sweet crude market. In other words, this is a market that could lead the way for the other one, and therefore we have to look at both of these charts in congruence. With that being the case, even if you do not get the opportunity to short this market, it gives you an idea of what could happen in the other market. Keep your eyes open, there is a trading opportunity about to present itself.

On the other hand, the Brent market bounces, we may look for a supportive bounce in the light sweet crude market. In this sense, although Brent is most certainly a negative market, we will not be trading it, rather using it as a tertiary indicator for the other grade of crude oil.