Don't be the bag holder

Nice channel on CAM here:

Note the failure at the top end of the channel, followed by a collapse to the lower line. Price has fallen under this and made a retest of the support line. 

CAM could flush through the low here and fall further; or it could create a double bottom and try to get back inside the channel. Either way, the use of technical analysis gives us a clear edge. If you're a serious investor, don't be left holding the bag at the failure of the $75 level.

Oil charts look ominous

Despite a bounce on OPEC's statement that low oil was "temporary", the chart has fallen back to give a bearish signal. With the stock market rising strongly off the FED announcement and gold looking a little weak also, it's possible we will get another leg up in risk, with a leg down in commodities.

The weekly chart doesn't look any better on crude oil and the levels at $50, and more so $40, look like a potential magnet zone for crude. I wouldn't be surprised to see these levels targeted in the "risk off" move that I mentioned. 

***I went long oil at $60, with an extra position at 55, which allowed me to take the second portion at $60.

I will hold off any other buying now but the lows at $40 would be a strong entry for me. Further lows will ensure that oil stays depressed into 2015 but there are always bounces to take advantage of.

Remember also, that OPEC cut production by 75% in the 1980s and couldn't halt price so awaiting their actions here is also futile. As yesterday and today's rally showed, OPEC created a small opportunity to cut loss or take a small profit,

The 1980s chart is shown below for reference:

If the oil price was to stay depressed through 2015 - 2017 it would do considerable damage to economies and corporations as it did in the 1980s. 

USD/CAD update

The plunging oil price has knocked the wind out of the Canadian dollar and price is approaching a key zone; highlighted by the gold rectangle.

The top dotted line near 1.1800 signifies 'The last low before the high', which is often a strong support or resistance level. A breach of that resistance would clear the way for a run at 1.3000.