Stock Markets Continue to Decline. Oil Climbs Higher

Risk OFF mode is still there with us causing indices to decline and save heaven assets to go up. In this environment, the oil is slowly but gradually coming higher making new weekly tops and aiming for the highest levels since the end of May.

WTI crude oil broke recently the upper line of the pennant, which can be perceived as a positive sign as before forming this trend continuation pattern, the trend was bullish. As long as we stay below the 61,8% there is no buy signal yet but the chances that we will test this level are relatively high.

Next one is DAX which made new long-term lows. Price finally breached the local support on the 12100 points, which most probably triggered many stop loss orders. Currently that will be the closest resistance. Sentiment is definitely negative.

Tensions over the North Korea helped to increase the volatility but SP500 still stays in a tight range between the 2465 and 2485. The false bullish breakout from Tuesday increases the chances for a breakout of the support on the 2465 points. This level is being tested as we speak.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis