Tuesday Humor: Don’t Worry About Crude… “Because Lines”

Tuesday Humor: Don’t Worry About Crude… “Because Lines”

As you’re no doubt aware, it’s been a bit of a rollercoaster ride for crude over the past several days because… well… because fundamentals.

You know, things like record-er-er US stockpiles, rising rig count, and a bit of foreshadowing from the Saudis who on Tuesday informed OPEC that the kingdom raised output to over 10m b/d in February, reversing 1/3 of the cuts made in January, only try and play it off a couple of hours later…


But for those fearing the kind of deflationary downdraft and attendant market rout that a continued collapse in crude might well occasion (remember January, 2016?), don’t worry because… well… “because lines“…

Via SocGen

Down move in Brent has so far halted at our advocated support of $50.60/50.00 which consists of the channel support in force since January 2016 low of $27, the 200-day Moving Average and the 38.2% retracement of the 1-year up trend.

Formation of a daily Hammer pattern at $50.60 combined with weekly and hourly indicators withstanding multi-month floors points to a near term rebound. Holding $50.60/50.00 Brent should therefore edge higher towards $52.20 and $53.00, the down sloping channel limit (blue dash) and the 23.6% retracement of the correction in force since early January. It will take a break past $53.00 for an extended rebound to be set up, in which case Brent will head towards $54.20 and more importantly towards the multi-month graphical level of $54.74.


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