"We have been pointing out the convergence of the recent rally in crude oil from the big drop over the past seven months with its historical seasonal low. There is also another more irregular financial market pattern we have highlighted over the years, mostly with respect to the Dow and the broad US stock market. “Waterfall Declines” are the propensity for markets to recapture deep, fast declines over a period of weeks within a period of about 3-8 months.
Crude oil’s 40% drop over nine weeks from Thanksgiving to the end of January is quite a waterfall decline. As you can see in the chart below, crude completely collapsed when it broke support in late November after spending most of the month around $75. It is currently attempting to break out above resistance at about $55 right near the pink 50-day moving average. If it can break above $55, $75 is the next major resistance level. There is also some resistance at $65. "