Looking at the current situation in crude oil, we can say with conviction that July was the worst month for the commodity since the begining of the year. In this period of time, crude oil lost 20.85% (making our gains on the short position even bigger) and broke below the Apr low, closing last month at its lowest level since March. Although we saw a rebound after this big downward move, its size didn’t confirm oil bulls‘ strength, which resulted in another decline. On top of that, yesterday’s EIA report showed another drop in crude oil inventories (bullish fundamental factor), the commodity moved lower once again and hit a fresh multi-month low of $44.83. Does this show of weakness suggest lower values of the commodity?

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The crude oil market has certainly made us wait to see the bearish scenario to play out, but when it did, it moved with vengeance. The price of black gold plunged and declined almost $10 this month and those holding short positions were handsomely rewarded. Of course, no market can move up or down in a straight line, so the fact that we saw a rebound after such a big decline is not surprising. Where will crude oil move next and how can one position themselves given the likely outcome?

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Looking at the crude oil’s charts from today’s point of view, we can summarize the recent month in one sentence: more of the same. Although oil bulls tried to push the commodity above the key resistance zone several times in the recent weeks, all tests have failed. Is it possible that the oil-to-gold, stocks-to-oil ratios and crude oil priced in "other currencies" give us more clues about future moves?

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From today’s point of view, we can say with full conviction that April was the best month for oil bulls since June. In the previous month, crude oil erased almost 30% of the June-March declines and almost touched the barrier of $60 as the combination of a weaker greenback, the situation in the Middle East and further reductions in the number of oil rigs supported the price. Additionally, in the first days of the new month, light crude extended rally and climbed to a fresh 2015 high of $62.58. Are there any technical factors on the horizon that could drive the price higher or lower in the coming weeks? Will the oil-to-oil stocks, stocks-to-oil and gold-to-oil ratios give us more clues about future moves?

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In March, crude oil extended declines and hit a fresh 2015 low, but the commodity reversed and rebounded sharply in the following weeks, erasing over 80% of the preceding declines. The first days of April were also good for oil bulls as the commodity extended rally and broke above several resistance lines. Despite this improvement, the most important resistance level withstood the buying pressure and triggered a sharp decline yesterday. As a result, light crude lost 4.26% and invalidated earlier breakouts. Does it mean that crude oil’s rally over?

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