With OPEC failing to agree on production cuts, the raging bear market in energy remains in full force.

Major support from the end of the 2008 bear market does not kick in until the $35 per barrel area, another 7% below Monday’s $38 level.

Given that the price of a barrel of oil has fallen $69 in 18 months, predicting a drop of another three bucks doesn’t sound like a bold forecast. But the point is that what may appear to be a low price in oil may not yet be cheap. And given the total price decline to date, this support level may be nothing more than a suggestion. After all, major trends often continue longer than we might expect.

It seems that I wrote almost the same thing about gold here last week (Getting Technical, “Gold Can Fall 15% More”, Dec. 2). Both oil and gold – indeed most other commodities as well – remain in bear markets, putting pressure on stock markets in commodity producers such as Australia and many emerging markets.

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