The spot crude price action is playing out exactly how chart readers predicted. To understand this, you need to look at the chart and recent price action. Spot crude topped out around the $52 per barrel level. This was a psychological resistance point because it was a perfect 100% move from the $26/bbl lows in early 2016. Logically it makes sense this would be a top.
From that $52 level, oil fell sharply to $46. While only slightly over a 10% drop, this price action combined with the 100% price move up prior, claims a technical top by technicians. Let's also not forget how overbought crude oil was and how every analyst/market commentator was bullish at $52.
For those of you that do not know, when everyone is bullish on a stock, commodity, currency, ect, that is a dead on signal that the top is in.
Think about the bearish sentiment at $26 that turned out to be the bottom. It is always the opposite of the masses. Bottom line is, with a top at $52 and a pullback to $46, you would expect a buy the dip bounce. However, any bounce is a short sell as long as the $52 is not breached. Sure enough, price shot back to $50+ this morning only to talk on oil inventory numbers.
The next drop will take out the $46 recent low and extend itself another $6 to $40/bbl. Look for this to happen within a week or two.
Chart: http://ift.tt/28Q61gM
Gareth Soloway InTheMoneyStocks
Submitted June 22, 2016 at 01:08PM by inthemoneystocks http://ift.tt/28MPgiS
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