Crude Oil has been on a seemingly inexorable rally since mid August, rallying over 20% in this period. Recent price action is show signs of a top being put in-note that the last rally to new contract highs showed bearish divergence with MACD. In addition, as my friends at Moore Research (www.mrci.com, contact me for a trial.) have pointed out, crude oil seasonally peaks in early October and generally declines into mid December.
The chart below is the daily for November crude oil. See the blue horizontal line at $80? It has served as a general pivot area for the past weeks, and today’s decline below it may be setting the stage for more selloff. Breaching today’s low (a short term double bottom around $79 could be setting the stage for a decline to Fibonacci support at $76.
(double click on chart to enlarge)
