Crude Oil Forecast November 16, 2015, Technical Analysis

Light Sweet Crude

The light sweet crude market initially tried to rally during the course of the day on Friday, testing the $42.50 level. By doing so, we found enough resistance to turn the market back around and we drifted lower. Ultimately, we fell as low as $40.50, and it looks like we should continue to go even lower than that. The $40 level of course is somewhat supportive, but ultimately there is more bearish pressure than there is psychological significance to the number, so having said that we are sellers every time this market rallies, and fully anticipate this market heading down to the $39 level given enough time. The US dollar continues to strengthen overall, and that means that the market will continue to struggle as the headwinds will continue to punish the overall value of commodities in general, and of course this one.

Brent

Needless to say, Brent has a lot of the same headwinds that the light sweet crude market has, but technically speaking is much weaker. After all, we are at the lows right now, and have formed a shooting star for the session on Friday. That is a very negative candle, and with that being the case we feel that this market is going to head down to the $40 handle. With that being said, we are sellers on a break of the bottom of the range for the day on Friday, and of course would sell rallies that show any signs of resistance above as the market is so bearish.

At this point in time, as long as the US dollar continues to strengthen, we’ll see any relief coming for the Brent market, and that being the case we believe it’s only able to be sold at the moment as this market should find plenty of bearish pressure going forward. At this point in time, we do not have a scenario in which we start buying Brent again, as the market simply looks absolutely anemic at the moment, and as a result it’s difficult to do anything but sell and sell again.