In case all the turmoil in Europe has distracted you, here's an important reminder as we wind down the month: Crude oil was at $105 a barrel at the start of May. Today it's trading below $90, more than $15 -- or 14% -- lower.
Crude oil is literally a tick away from printing what would be its sharpest single-month retreat since 2008, a horrendous period when the U.S. and global economies were imploding, and crude oil went from $140 to $40 over the course of six months.
Is it really that bad out there right now? Will crude really behave so poorly?
For Richard Suttmeier, Chief Market Strategist at ValuEngine.com, the answer is yes -- and then some.
"I think between now and the end of June we'll test $79.83," the renowned technician predicts in the attached video, adding that even at that level, tropical storms and hurricanes would be the only catalyst to send prices back on the rise.
If he's right, $79 crude would not only mark a 7-month low but would also complete a 30% plunge from the recent top of $110 in late February.
Of course, as any energy analyst or trader will tell you, the crude crisis is not just the result of slack demand and economics, but is also the biproduct of a resurgent dollar. Regardless of whom you ask, the greenback's role in this crash has also been substantial.
For those who read Suttmeier's comments on the death cross and gold, a glance at crude charts shows a similar moving average cross is getting closer by the day, where the 50-day average is now within $5. Suttmeier says the 200 day average at $96.46 has become the new resistance.
Near term tests include the May payroll report this Friday and the FOMC meeting in 3 weeks.
