Chart of the Day: Crude at major inflection point down
Couple of major points to unpack relating to oil which points a major inflection point downwards to a material low:-
#1 Oil is on a downward trend since peaking in Oct'18. In fact, the Oct'18 peak is a lower high vs. the 2014 peak which was a lower high from the 2008 peak. In short, there is a massive decade long downtrend line which suits the thesis that oil usage is in decline. Please note, I am saying decline in usage but am not saying oil is dead.
#2 There are multiple ABCD down patterns in play:-
#2.1 Major ABCD starting from Oct'18 peak and CD leg commencing in Apr'19
#2.2 Minor abcd starting in Apr'19 with BC leg just completed with the immaterial new highs into SSR and fibonacci resistance. Link to earlier call for the minor bc leg can be found below.
abcd price target is $45 and ABCD price target is $31.50. At $31.50, we can start discussion again for a potential up cycle as there is still an underlying demand for oil coming from the industrial complex and the fact remains, there are no new capacity for conventional oil which would suggest tightness as light sweet is structurally unsuitable for use as an industrial product.
#1 Oil is on a downward trend since peaking in Oct'18. In fact, the Oct'18 peak is a lower high vs. the 2014 peak which was a lower high from the 2008 peak. In short, there is a massive decade long downtrend line which suits the thesis that oil usage is in decline. Please note, I am saying decline in usage but am not saying oil is dead.
#2 There are multiple ABCD down patterns in play:-
#2.1 Major ABCD starting from Oct'18 peak and CD leg commencing in Apr'19
#2.2 Minor abcd starting in Apr'19 with BC leg just completed with the immaterial new highs into SSR and fibonacci resistance. Link to earlier call for the minor bc leg can be found below.
abcd price target is $45 and ABCD price target is $31.50. At $31.50, we can start discussion again for a potential up cycle as there is still an underlying demand for oil coming from the industrial complex and the fact remains, there are no new capacity for conventional oil which would suggest tightness as light sweet is structurally unsuitable for use as an industrial product.
