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WHAT IS THE PRICE OF CRUDE TELLING US?

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On Thursday August 2, $WTIC crude made an interesting turn.

SharpChartv05.ServletDriver
Currently crude is in a downtrend denoted by the red line.
We have started August creating a downward column of O's. The Red 8 shows the first box in August with a move of at least $3.

You can see that since June (The red 6), we were stuck in a range into July. In July (Red 7) Crude was able to push above $87. It then pulled back, roared to $93 and has since settled back to sit just around the previous support / resistance level built in June.

Upside: If Oil can rally from this level, it would be very bullish. A push through to $93 would break the downtrend line. Looking left, $93 and $94 have been resistance. A push through there would probably allow oil to surge to $102.

Downside: If Oil goes through $86, it is bearish. A break through $84 would be a bigger warning as the price has spent a lot of time there (9 X's and O's) and should have more support. Obviously the 3 O's at $82 are a significant level. We are currently in a downtrend as indicated by the red line. The $76, $77,$78 level is the major floor for this market. The last 3 years, August has been a weak month where oil pulls back and then surges into the September, October months.

Watch crude closely for hints on a major economic trend. The big picture on the chart above is higher highs and higher lows. We are just in the trading range now.

Good Trading,
Greg Schnell, CMT

Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA). Learn More
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