I have received many requests to do an update on Crude Oil….so here we go-

Just short of 2 months ago the “Power of the Pattern” was suggesting further weakness was in the cards for Crude Oil and it could reach the middle of its 30-year trading range, which comes into play around $60 (see post here)

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Crude oil has declined around 10% since the last post, breaking below the $80 level of late.  At this time Crude is testing prior support at (2) in the above chart….Should Crude Oil work its way down to $60, it won’t be straight down, backing and filling from time to time should take place, with resistance along line (1) coming into play.

On 8/5 I shared that commodities would not be a good place to hide for a while going forward, see chart below. (see post here)

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Since the post on 8/5, the broad based MS Commodity Index (CRX) has declined over 14%.  Once the CRX index broke support at (1) in 2008  (CRX only fell over 50% in a few months after the break), it was a sign that GE1 was at hand and investors wanted to exit risk assets.   The break of support at (2) continues to suggest that investors are looking to lower risk everywhere…reflecting that there are few places to hide!