Today’s bounce on world markets caused a rally of Brent Crude on the hourly chart, testing the former primary support level at $105/barrel. Institutional buying of stocks does not change the fundamentals: high crude oil prices will cause a double-dip recession. No action by the Fed can change this.
* Target calculation: 105 – ( 120 – 105 ) = 90
Retreat below resistance at $105 would confirm that Brent Crude has joined Light (WTI) Crude in a primary down-trend. Target for the down-swing is $90*.
We need a major re-adjustment of crude oil prices to set the global economy on a sound footing.