Crude Oil: Breakout in Crude Would Provide Support for the Market

$CL #Crude Oil #Macro analysis #Daily #trading setup

Cycle analysts noted that Crude oil normally leads the equity market by 30 – 45 days. This is why that major crossroad in Crude is so important for the stock market.

The bullish scenario argues that crude oil made a lasting bottom in December 2022:

You can see that a consolidation off the June top was shaped as a bullish looking wedge. It spiked under support of the blue trend line in mid December 2022 but quickly reclaimed that broken support.

Off that low Crude made a micro a-b-c move that can be labeled as a micro wave i up.

If we get a micro a-b-c decline making a higher low, bulls will get an attractive long setup for a breakout over the red trend line. For that bullish scenario the main support is 74.30.

Conversely, if bulls fail to stop this decline over 74.30 that would confirm the very bearish count that argues for a strong decline down to $50:

I think crude will define the fate of the equity market in the 1Q 2023. If crude manages to breakout that will likely mean equities will not breakdown under October 2022 either.

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