Patient Crude Oil Bears Still Seek Their Reward

The Commodity Specialist view - Following the decisive May downmove a consolidation pattern has been unfolding, with expectations of an eventual further bear leg maintained throughout. Is the market now ready to oblige?

• BRENT CRUDE - WEEKLY CONTINUATION CHART: The May fall was marked by a Key Reversal Week and Month (latter not shown here). Good support came from around the 38.2% pullback level, but in the Climate & Energy and Commodity Specialist Guides we have maintained our expectations of a further bear leg.
• BRENT CRUDE – DAILY CHART OCT-10: The summer consolidation looks to have completed a simple/standard up-down-up shape. The break of a small channel base projection is an initial negative sign now – a further one would a close below the 71.50 06-Jul low. We can then target the 61.00 area, where an equality target resides (May downleg extended off 83.09 04-Aug high). A bear channel base projection also currently runs through here. The whole picture would change markedly should price recover through that 83.09 high.
• US LIGHT CRUDE – DAILY CHART OCT-10: On the US Crude chart the 06-Jul low, 72.15, has already been breached. Eyes are now swivelling towards the equality target, again at 61.00, and bear channel base projection.

[For the complete and illustrated version of this and future Updates be sure to sign up at www.sevendaysahead.com]