On the weekly chart, note the following:
-- Oil broke the 1+ year upward sloping trend line a few weeks ago. This indicates the major rally that has been moving oil higher is over.
-- The 10 and 20 week SMAs are both moving lower
-- The 10 week SMA crossed below the 20 week SMA
-- The 10 week SMA is about to cross below the 50 week SMA
-- Prices are below all the SMAs
-- Prices are using the 50 week SMA as upward resistance rather than support
On the daily chart notice the following:
-- The 10, 20 and 50 day SMAs are moving lower
-- The shorter SMAs are below the longer SMAs
-- Prices have moved through the 10 and 20 week SMA. However, this is due to a huge market problem caused by the bail-out issue. The assumption was if the bail-out goes through the US economy will stabilize which will increase oil demand. Now it loos as though traders are re-thinking that idea.
-- Prices are still using the downward sloping trend line as resistance.
Bottom line: these are still bearish charts.
