Crude Oil Forecast October 15, 2014, Technical Analysis

Light Sweet Crude

The light sweet crude market fell hard during the course of the day on Tuesday, crashing through the $85 level initially, and going all the way down to the 82 level during the course of the day. That being the case, the candle looks very bearish, and we should continue to go much lower. The $80 level below should be significant support though, so we are looking for a little bit of a bounce from there but if we do get that bounce, it is possible that we have continued selling pressure after that bounce. We like selling rallies going forward, at least until we get some type of longer-term bullish candle.

Because of that, we are very bearish of this market going forward and we do recognize of the US dollar in general continues to strengthen also. With that being the case, it’s hard to imagine that commodities in general will do well.

Brent

The Brent market fell hard during the course of the day as well, losing 4.25% during the session. The market slammed into the $85 level, an area that would naturally be supportive due to the fact that it is a large, round, psychologically significant number. However, the Brent markets are in a lot of trouble, so we will look at any rally at this point in time as an opportunity to sell at higher levels. It is not until we clear the $90 level significantly that we would consider buying the Brent market, we do believe that it continues to be a market that will in fact be fairly soft.

If we did get above the $90 level though, we feel that the market would then head to the $95 level given enough time, and with that we would be short-term bullish but we do recognize of the longer-term trend certainly seems to be to the downside and as a result we are not as comfortable holding onto longer-term bullish positions. Ultimately, the trend seems to be very strong but it has been a bit oversold recently so a bounce is a necessarily out of the question.