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Chris Vermeulen

Our Adaptive Dynamic Learning (ADL) predictive modeling system is predicting that Crude Oil will break recent support levels near $55 and move very quickly down to levels near $50 to $51 before August 2nd, 2019.

After this new downside move completes, we expect Crude Oil will form a short-term price base just above $50 that may last many days or weeks.  Our earlier analysis of Oil called this move and we outline our future oil expectations.  For more information about this call, please review the following research posts.

This Daily Crude Oil chart highlights the next downside price move that we are expecting will take place over the next 4 to 7 days.  After the $50 to $51 lows are reached, Oil should base near these levels and begin a moderate upside move back to levels above $54.  This move aligns perfectly with our earlier analysis and research and strongly suggests that oil will target a sub-$40 price level in the near future.

What does this mean for investors and traders?  It means that our ADL predictive modeling system is accurately calling these moves in oil and that the sub $40 price expectations could reflect a decrease in global economic expectations over the next 6+ months.  For oil to continue to fall to levels below $40, demand would have to wane or supply would have to increase globally – or both.  Additionally, it would likely indicate that global expectation for the future demand for oil would be far lower than previously expected.  A commodity price collapse, like this, could be an early warning sign that the global economy is slowing much faster than many expect or it could be a sign that the fundamentals in the oil market are shifting as the economy is slowing.

Either way, it appears we are headed for sub $40 price levels in oil later this year.

CONCLUDING THOUGHTS:

In short, you should be starting to get a feel of where each commodity and asset class is headed for the next 8+ months. The next step is knowing when and what to buy and sell as these turning points take place, and this is the hard part. If you want someone to guide you through the next 12-24 months complete with detailed market analysis and trade alerts (entry, targets and exit price levels) join my ETF Trading Newsletter.

Chris Vermeulen 
www.TheTechnicalTraders.com

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