Crude Oil Forecast to Fall to Further Lows

Index Strat Risk Target Oil [B]FLAT[/B] Gold [B]SHORT[/B] 1010 600 Silver [B]SHORT[/B] 14.60 < 8

[B]Short-Term Technical Forecast for Crude Oil[/B]

Crude oil prices have thundered through triangle support, opening up a move towards key Fibonacci support and perhaps further declines. Next price floors are former spike-lows and the 61.8 percent Fibonacci retracement of the 39.40-54.00 move at 45.00. Given extremely oversold conditions, there is a distinct possibility that prices will see a short-term retracement. Yet momentum remains to the downside, and a break of 45.00 would only confirm that fact. Resistance is former support at 47.00.

[B]Long-Term Technical Forecast for Gold[/B]

“The decline from 1008 is an impulse (5 waves), indicating that the larger trend has turned down. Since 1008, gold has declined in 5 waves and advanced in 3 waves at multiple degrees of trend. Price ideally remains below 968 (wave 2 high).” Already below the 55 day SMA, price is now testing the 200 day SMA. Gold ideally remains below 902 on its way to a short term bearish target at 808 (Fibonacci extension). Ultimately though, I expect weakness to extend below 692.
[B]Short-Term Technical Forecast for Gold[/B]

Gold prices have thundered through support and now seem likely to test significant lows near the 865.00 mark. The COMEX contract had been stuck in a progressively narrower trading range, but today’s decline clearly went below the range low. Next targets now include 3-month lows of 865.00. A break of said level would likely go on to test the bottom of the contract’s multi-month trend channel at approximately 850.00. Near-term resistance is former support at 890.00.
[B]Long-Term Technical Forecast for Silver[/B]

The pattern in silver is clear. The drop from the March 2008 high to the October 2008 low was in 5 waves, indicating that any subsequent rally should prove corrective. The rally was corrective; the count shown is an A-B-C advance with wave A as a leading diagonal. Waves A and C are close to equal, which is common in a correction. The next bear leg in silver is most likely underway.

[B]Short-Term Technical Forecast for Silver[/B]

The COMEX Silver contract finds itself in much the same position as gold, as silver prices have broken key trend lows. Subsequent price targets become previous spike-lows near the 12.000 mark, and a break lower would signal a move towards 11.50 is likely.