Macro Morning: Oil at $35?

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By Chris Becker

We’ll start this morning’s report with the adage that robust market positioning is not about predictive ability but reacting to what is happening. That is, expecting falls in an downtrend especially when major support is under pressure. And that’s exactly what is happening in oil as WTI fell to a new four year low overnight, cracking 3% to below $75USD per barrel:

Chart CL-OIL, MN1, 2014.11.13 21:23 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

Now the problem with this chart is there are no further technical levels – save a minor support at the $66 handle – till terminal support at the GFC low $35USD per barrel. Yes, $35! The macro forces of OPEC reducing supply and shale supply also coming off the boil surely should arrest a fall before then, but again, don’t discount the possibility.

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