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Anyone remember the last time Crude Oil was at $34? This level came into play six years ago, as it hit the bottom of rising channel (A). The above chart highlights the rally from the 2008 lows at $34 when only 25% of investors were bullish Crude and the 2011 high at $114, when 75% of investors were bullish.
The Power of the Pattern back in September, when Crude was trading above $90, suggested the odds were high it would reach the $70 zone if this happened. (see post here) Once Crude Oil broke support of its multi-year pennant pattern in August, it has been falling like a rock.
Where might Crude stop falling and find support? Joe Friday says, Crude Oil hit is half way point (50% level of 2008-2011 rally) last night with 33% of investors bullish, which could become a price point where a bounce could take place. The stronger potential support comes into play at (1) due to rising channel support and the 38% Fibonacci retracement level coming into play around $65.
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