The price of Crude Oil futures is under pressure Wednesday. The financial media is drawing a straight line from weakening Treasury yields and stock prices to a weak economy and less demand for crude oil. I won't argue against that kind of thinking, but I want to focus on where oil futures could be going in in the short-term.
Let's go to the charts.
In the weekly close-only line chart of the continuous futures contract (a series of nearby futures contracts linked together to make a longer-term chart) below, I can see that prices are breaking downward from a three-month sideways consolidation pattern in the $80-$70 area. Prices are pushing down into a zone of potential support (prior resistance) in the $70 to $60 area. Weakness below the midpoint of this area (below $65) will mean that the odds rise that the support will be broken.
Trading volume has been diminishing and the weekly OBV line has been weakening since the middle of June. The Moving Average Convergence Divergence (MACD) oscillator is bearish.