One of the most important lessons I learned early in my trading career was that price action needs to help confirm the fundamental story. A story can sound convincing. But for traders, the question is practical: Is the market moving in a way that supports it?
Treasury Secretary Scott Bessent said during an appearance on 2WAY TV that we are on the “other side of the energy shock.”
There may be an argument that the worst of the initial spike is behind us. But looking at crude oil prices and the technical levels, I am not ready to declare victory.
December crude oil futures reached $101.37 today. Although the price has since slipped below $100, it remains higher by about 0.78% as I speak. Before the war began on February 28, crude was trading around $67. Near $100, that leaves the price roughly 49% above that starting point.
The initial surge that carried crude to its March high of $119.48 may have passed. The higher price burden associated with the move from $67 to near $100 is still very much in place. Coming off the peak and unwinding the increase are two different milestones.
For traders, that is where the technicals help. They give us specific levels to measure whether sellers are taking control and whether the price action is beginning to support the story.
Right now, those levels continue to favor the buyers:
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$97.00–$98.48: The price remains above this swing area. It is the first support zone sellers need to break.
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$96.83: The rising 100-hour moving average provides the next shorter-term reference.
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$94.46–$94.60: The rising 200-hour moving average at $94.46 sits near the 38.2% retracement of the July-to-September advance at $94.60. That puts two technical tools in the same area, making it an important downside hurdle.
The educational point is that a bearish shift develops in steps. Sellers do not need to break every support level before the shorter-term bias can turn lower. But they do need to start breaking support and keeping the price below it.
A sustained move below $97.00–$98.48 would be the first sign of progress. A break below the 100-hour moving average would strengthen that signal. Getting below—and staying below—the $94.46–$94.60 area would provide stronger evidence that sellers are taking control of the recent advance.
Until then, the price is holding above support. Buyers still have the stronger technical position.
The longer-term picture also needs to be respected. Crude remains above its 100-day moving average at $85.86 and its 200-day moving average at $84.45. Those are deeper benchmarks for judging whether a short-term decline is developing into a broader reversal.
Would breaking those moving averages prove that the economic effects of the energy shock are over? No. But it would provide stronger price confirmation that the market is unwinding the increase.
My job as a trader is to recognize what the market is doing now, define where that view would change, and adjust when the evidence changes.
For now, crude oil’s technical bias remains tilted higher. If sellers begin breaking support and holding those breaks, I will respect that shift. The fundamental story gives us something to consider. The price action gives us something to measure.
In the video, I walk through those technical levels, explain what sellers need to accomplish, and look at what would bring the energy-shock narrative into better alignment with the price action.
This article was written by Greg Michalowski at investinglive.com.