Yesterday was a crazy FOMC day as expected, after the fed came out the market ripped up. Producers at CNBC sent interns to the basement to get the DOW 10,000 hats out of storage. But it all came back to reality. One hint that the pump after the Fed meeting was junk was oil.
Over the past few days, I have been closely watching Oil to see where it will go since it was in a tight triangle. Yesterday it broke down past 69 a key support level, and now has a price target of 62.
Here is a PnF chart of Oil, showing how it broke its upper-trendline and support at 69.
This is how it looks on the candlestick chart. It broke it's 8 point triangle and has a price target too of 62.
Why is oil starting a new trend down important? Because since March oil's decline has preceded the market's decline. Each time oil started lower the market followed later.
The final nail in this coffin will be the dollar firming up and finding a bottom. It will drive equities down and oil down.
