Crude Oil Buried After Breaking $90

Yesterday, I noted that a break of $90.00 in NYMEX crude could really open the floodgates of selling. That is exactly what has happened on Wednesday, as crude oil punctured the $90.00 level to the downside in the overnight session and has not looked back. At last check, crude futures were trading down more than 3% on the day to $87.95. Not surprisingly, the sell-off in crude is corresponding with a lower EUR/USD and a plummeting stock market. On Wednesday, the EUR/USD was last trading down another 0.58% to $1.2417 while the Dow Jones Industrial Average had lost more than 150 points to 12,428. Looking at the past charts, it now appears likely that crude could continue to move lower and settle into a range between $75.00 to $85.00. Given the trajectory of the sell-off, which started above $105.00, a sharp bounce is certainly a possibility, but a sustained recovery from current levels appears unlikely.