CL ready to fall in short and intermediate-term

XLE and XOP had very high odds (100%) of putting in higher lows and higher highs today with RSI(7) day-over-day spread from last Thurs to Friday at 10+.  Since Dec 26th, this type of momentum spike never led to lower lows until TODAY.  Additionally, many other non-oil related equity sectors had very strong odds of putting in higher lows today based on various momentum statistics but many of them took out Friday's lows and actually closed significantly lower which is a clear break from the regime that began Dec 26th.  This loss of upside momentum in all types of equities supports my thesis that equity prices are set for an intermediate-term downtrend which, in turn, will place proportional downside pressure on CL to move toward the December lows in the intermediate term (weeks/months).

In other CL news, Baker Hughes that showed active U.S. oil rigs in the week ended Mar 1 fell by -10 rigs to a 9-3/4 month low of 843 rigs continuing their downtrend since last Fall lending to the possibility of a slowdown in US WTI production in 2h 2019.  This possibility would bolster the bull view for 2h 2019 in light of sharp OPEC+ supply cuts especially to the US year-to-date, in addition to improving global demand conditions as a Chinese recovery and reduced Eurozone Brexit risks to economy may offset a slowing US economy impact on worldwide oil prices.

But the supply chain between the Permian and Gulf Coast ports through pipelines and expanded port capacity won't further support export demand until 2h 2019-2020.  Until then, logistical bottlenecks will continue to leave US domestic demand as the major consumer of WTI until later this year.  So the exposure of WTI demand to US economic growth (equities are forward-looking proxy) leads me to believe we have significant further downside until export demand can begin to buffer WTI price from US demand somewhat.  The WTI Midland-WTI Houston and Cushing-Brent spreads would decrease significantly as WTI grows into an international oil grade enabled by supply chain improvements.

I also noticed before 1030am on Friday that CL saw large blocks find no bids (in increasingly unaccommodating book) identical to trading that occurred in NQ, ES, and YM at the exact same time.  This increase in correlation to nearly 1.0 did not go unnoticed and bolsters my thesis that equity weakness will carry over into CL.

So in light of that highly correlated weakness witnessed this past Friday, surprisingly weak XLE and XOP (and other non-energy related equity) trading today negating the recent regime, and an expectation of weakening US equities in the short and intermediate term, I expect CL fall precipitously in the short and intermediate term.  Beyond the obvious $55.00 support which should break soon, I would expect mid $52s to provide some support as a confluence of previous support, Bollinger Band (20,2) lower band, and 50-SMA.