Crude Continues to Drill Downward
Last week's forecast for a high in the Dow on February 1st was a perfect hit. As of last Friday, the Dow has fallen 438 points since last Monday's high.
Crude spent last week trying to breakout from the 34-dma but, in the end, fell $2.73/bbl. for the week closing at 30.89 and printed an engulfing bearish candlestick on the weekly chart.
If 30.00 is broken again, my price forecasting model generates a target of 22.90. However, a break out above the 34-dma would be bullish and a close above 37.90 would 'seal the deal'.
Cycles point to an important low in the second week of March and seasonality is distinctly bearish in February.
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