Friday, August 21, 2015
Crude Slips to a 12th New Uninterrupted Low
The nearest to expiry crude oil futures contract (October ’15) traded to a new low this morning. The contract traded to within a whisper ($40.11) of the $40 level, a level that is clearly still a target for some traders. The rolling 1st crude future has not penetrated the $40 level since early 2009. Meanwhile, today marks a 12th new lows without a three session pause since the contract traded to the upper extreme of the downward sloping channel that defines trade since mid-July.
This 12th new lows indicates crude oil futures is a rather stretched market and suggests it is susceptible to a bullish reverse in order to correct oversold conditions. Otherwise, there is currently no other striking technical developments that indicate a bullish reversal should be expected.
Earlier this week when there were only 9 new session lows, we pointed to a bullish hammer from last Friday that gave rise to a modest 2 day recovery. Since then however, prices have remained toward the lower end of the earlier noted bearish channel. That channel bottom would intersect trade today at $39.72. A settlement below this level today might raise further concerns for near-term oversold conditions.