Oil has tumbled the past few days, begging the question “what about QE3?” It was supposed to prop up commodity prices. There are many competing theories as to the influence of elections, Saudi assistance, etc. But, the bottom line is CL had tagged some important channel lines and simply corrected.
There are some pretty obvious long-term channels, as well as two huge rising wedges. The first one broke down only 50% of the way to its apex in price, and 61.8 of the way in time, yet — as is often the case with early breaks — prices came back to tag the apex in time (as well as a major channel line.
The latest RW broke much later — .707 in time and .786 in price — and is already beyond the apex in terms of time. The apex is around 144 — close enough to the all-time high of 147 to be considered a double-top were it to come into play.
To do so, however, CL would have to break through a fan line from that 147 high. As the following chart shows, the fan lines have been pretty effective at signaling major moves.
The next such potential support is just below at around 88. But, this line has been broken twice before on strong plunges, and CL seems determined to make another tag on the long-term support represented by the solid yellow channel line below at 78.
But, to do so, it’ll have to break through triple harmonic support. CL is also nearing the largest pattern’s .500 Fib at 90.24, which corresponds with the .382 on two smaller patterns at about the same price.