Yesterday the September CL contract closed below a key support target and we now have a specific downside target to work towards. Here's the current daily chart:

Click on image to enlarge!

The red trendlines show how the target was calculated. The prior swing low to the following high, multiplied by 1.272. That’s the ratio where the market will be considered as oversold and should be susceptible to a bounce. In some cases, where momentum is sufficient, we’ll see the second ratio from the same swing using the 1.618 multiplier as a target. You can see that labeled below our first target, and at that point it’s overlapping a strong longer term support level too. Since a break of that target/support zone would give us a target in the 65 area, the probability of a hold, at the very least for a temporary “debate” regarding more downside, is very strong! We’ll first look for a possible hold at the first target and look for whether or not new resistance holds on a bounce.

For more from Mark including his “Chart of the Day”, visit MJBraun.net.