With a swift plunge of more than $10, December Crude has crushed the $78.60 midpoint support of a target I gave here a while back, bringing into focus its ‘D’ sibling at 66.25 (see inset). That is now our minimum downside objective, but the case would become even stronger if the futures return to 78.60 in the days ahead. A secondary target at 68.21 should be considered and , like the higher number, be used to bottom-fish. It comes from the one-off ‘A’ at 99.77, but if it were to be exceeded by as little as 60 cents, 66.25 would be in play. There is also a minor target at 70.67 shown in the chart, and it too could foster a tradable bounce. _______ UPDATE (October 4): The futures have indeed rallied to 78.60 — exactly — affirming the accuracy of the more important downside target at 66.25. If and when the December contract gets down there, we should be prepared to bottom-fish aggressively. _______ FURTHER UPDATE (October 5, 7:30 p.m.): The futures eventually moved higher, but the 66.25 target should still be considered affirmed. For now, though, will have to wait and see if the rally flies or dies. My hunch is that it’s a hoax.
