I've drawn two long-term support lines on the chart above. The green line, which goes back to late 1998, connects the monthly lows from various market troughs. It has had multiple touches over the years making it a significant psychological area of support. It provided support when the market swooned in 1998 after the LTCM debacle, when the market crashed after the dot-com bubble burst, and yet again when the housing market went bust in 2008/2009. And yet here we are again, in the waning weeks of 2015, watching crude fight for its life on the very same trend line. In fact, if you look closely, crude is now trading below that crucial line. It found lots of support at the line earlier this year, and even managed to stage a feeble rally back to $60, but the weight of supply has proven to be too much. So much in fact, that crude has fallen below the green line for the first time in over 15 years.
The blue line, on the other hand, connects the lowest monthly closes for the past 10 years (as opposed to the green line which connects the absolute lows during the month). While not as long-term as the green line, it still represents a psychological area of support, particularly from it's significance as the the 2008/2009 ultimate low. What I find curious is that the green line and the blue line more or less converge in the mid $40s suggesting that crude currently sits directly on top of multi-decade dual support. Do you see now why it's do or die time for crude? It's already breached the green line and now it's only a couple dollars away from falling below the blue line. If that happens then my $35 prediction will almost certainly become a reality. If the world's most important commodity can't catch a bid, then what does that imply about the global economy as a whole?