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Published Thursday, January 7th, 2016

Introduction. Support failed and the market dumped yesterday. The “bear-fest” has now begun. The trend is down and likely to accelerate lower – it is not advised to be long. There are targets lower and these are likely to be mere staging posts on a much bigger move south. WTI’s target is to the Dec 2008 low at 32.40 – an important pivotal number. If this fails sell it whilst it has a 3 in front because the next target is to 26.65! Brent has an objective to 31.50, valid whilst below 34.55. Heat has an objective to 104.30; and RBOB to 102.31, valid whilst below 115.22. Gasoil has an objective to 272.75 valid whilst below 313.25. The key technical indicators are negative and lower numbers are likely. However the contracts are too far below their 5 day MAs for comfort so do not be surprised by nasty rallies to narrow the gap – sell these rallies. WTI hit and moved below its key long term c/p support at 35.35. This green lighted the target lower to the Dec’ 2008 low at 32.40. This is a key support. A move confirmed by a close (m/c) below 32.40 would activate the next target lower to 26.65. There is no serious resistance until the 5 day MA and the c/p around 35.35 – a sell. The 8 day is around 36.01 – also a sell on a rally. Meanwhile watch the action at 32.40 very carefully – a m/c below would be very bearish and create price Armageddon!

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Posted by Robin Bieber