Crude Marks Veteran’s Day With a Parade of Bears
Crude Oil may still hit $100, but it wasn't happening today, as the Dollar Index took a stand against the world's currencies. Since Crude and the Dollar have been tightly correlated, today's decline in Oil prices was not surprising. The December contract (CLZ7) was trading at 93.72 at the time of this writing. With all of the upside surge in recent weeks, today shows once again that anything is possible in any market at any time.
Looking at the chart, we can finally see something besides a straight line upward – notice how we are heading back to both the 15- and 25-day moving averages, almost touching the 15-day average today. Even if this (or the 25-day average) acts as support, we still have some downside wiggle room before either average will be hit. Another interesting study on the chart is the fast stochastic, which suggests a possible reversal in trend that would keep the markets waiting quite a while for $100. But if this is a pullback, $100 Oil in the near-term is still a very real possibility.
There was little economic news to be had on Veteran’s Day, but later this week traders will be watching for pending home sales, retail sales, PPI, and initial claims. As the week progresses, Crude Oil will likely play a big part in how almost all the markets are moving.
Mike Tosaw, Director of Education
