Crude Oil Fakes Breakout To The Upside As It Rolls Over

On Monday I discussed how Crude broke out above its resistance area & downtrend line. I said I would like to see consolidation and the 52 day MA turn back up before considering a long. Well since Monday, Oil has fallen sharply lower falling back inside the downtrend line, while also closing below $57.30 support and once again trading below the 52 day MA.
 
Given the 52 day MA is sloping down already and the setup we are witnessing this price action looks quite bearish at the moment. In the short term I'm looking for potentially a small retracement back to either 57.30 area, or a move back higher towards its downtrend line currently around $58.50.

However after the brief retracement process, I'm looking for Crude Oil to continue to roll over and head for $55.15 support as its first potential area to move towards.
 
Since on a macro level that global Manufacturing PMI's are rolling over at the moment, as well as supply rising from US Oil production its no surprise that Oil is weak at the moment. Since the last down move back a few weeks ago was around $50.60 level, its certainly possible we could reach this area over the next few weeks if we see follow through selling.

More importantly considering the 52 day MA is much lower now than 3 to 4 weeks ago, Crude Oil has the potential to move towards a lower area beyond the June lows.
 
However we are getting ahead of ourselves at the moment, especially considering how bullish US stocks are presently this could come to play on Oil & stocks this week and next since they are closely correlated.
 
Either higher stock prices can support Oil prices despite the bearishness or by forcing stocks to pullback lower in the short term. Its also important to note that on occasion the two assets classes have and can move in opposite directions for a while. But its certainty worth watching closely for the rest of this week.

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