crude oil testing key support april 18


Crude Oil and the S&P 500 have had a high degree of correlation over the past 15-months. Once Crude started heading lower in late 2014, the broad markets struggled to move higher.

Crude Oil hit falling channel support in January of this year and rallied. The broad market stopped falling at the same time and followed Crude’s rally.

Last week Crude Oil came very near the top of falling channel (A) at (1) last week. As it was nearing falling resistance, it created a one week reversal pattern.

The decline late last week and the weakness in Crude this morning, has it testing steep support line (2).

We humbly remain of the belief that what Crude Oil does, will have a big influence over stock prices going forward.

A breakout above falling channel resistance (A), would send a positive message from Crude and I suspect stocks would like it. On the reverse side, a break of support at (2), could usher in selling pressure for Crude Oil, which could ripple into stock markets around the world.

What Crude Oil does at (2) in the upcoming week(s), looks to be very important for it and stocks. Stocks would love to see a bullish reversal at rising support and a breakout above falling channel (A)!


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