Crude oill is worth about a third (down 65%) of what it was worth back in 2008. It’s lost about half of it value from just three years ago — 2014 highs. Oil's decline over the past 9 years has created a series of lower highs, which shows that it remains in a long-term down trend.
Crude Oil: The Last 10 Years
As mentioned above, crude has continued to create a series of lower highs since it hit resistance line (1) back in 2015. It hit falling resistance line (2) earlier this year, only to head lower and create another lower high.
Crude has experienced another counter-trend rally, taking it up to test another lower high at (3), which could be a heavy resistance line.
At the same time, crude is testing overhead resistance, and crude traders have created another very crowded trade — almost to the size of the crowed trade that was established at the 2014 highs. At that time, traders believed crude was going to head higher and boy did they bet big time on that belief. We all know what followed that crowded trade, big decline in crude and the bulls were hurt.
With traders establishing a similar trade to 2014, crude's behavior at falling resistance (3) becomes very important for this sector.