January crude oil futures on Thursday hit a fresh six-week low and traded below $86.00 a barrel. The market has taken a haircut to the tune of around $14.00 a barrel from the all-time high above $99.00 scored a couple weeks ago. Serious near-term technical damage has been inflicted to suggest that at least a near-term top is in place. See on the daily bar chart for January crude oil that uptrend lines have been penetrated on the downside. Also, see at the bottom of the chart that the Moving Average Convergence Divergence (MACD) indicator is in a bearish mode as both the thick blue MACD line and the thin red “trigger” line have been trending lower for the past month. Both lines are poised to move into bearish territory below the horizontal “zero” line.
click chart to enlarge
The near-term bearish posture of the crude oil market, which has been a leading “outside market” for many other futures markets, is a warning shot across the bow for all raw commodity market bulls. If crude continues to break down then it’s likely that other raw commodity markets will also struggle on the upside. Stay tuned!
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