Crude's $86.85 Settle Puts December Contract on a Pivot

By Elena Vasquez

NYMEX's December crude oil contract settled at $86.85 on Monday, down $3.98 or 4.38%, its lowest close since Sept. 4, after a 6.40-point range between $91.42 and $85.02. The session range was the widest since Nov. 4, and the technical work behind it comes from MyAlgoIndex on TradingView.

How did Monday's selloff unfold?

The high printed in the 10:00 p.m. ET bar on Sunday evening. By the 9:00 a.m. ET bar the December contract sat at $86.19, and it rebounded to $88.50 in the 10:30 a.m. ET bar before easing into the 2:30 p.m. ET settlement. Monday also marked a lower high and a lower low against Friday.

The low came in that same 2:30 p.m. ET bar, after the settlement, when the contract printed $85.02, the session low and a one-month low. A news-feed report crossed the wires in that bar citing sources that Washington had allowed uranium enrichment inside Iran at 3.67%. The report did not describe a confirmed agreement, and it coincided with the low rather than establishing cause.

Later remarks from the President described positive momentum toward an end to the conflict. MyAlgoIndex's market commentary attributed the decline to "optimism over diplomatic progress on Iran," which the review presents as attributed commentary rather than a confirmed driver.

Takeaway: Both extremes of the session arrived on headlines, and the contract closed near the bottom of the range.

How far did the move reach across crude and products?

January Brent fell 5.85% to $92.57. Gasoline dropped 4.53% and heating oil 2.70%, while the dollar index eased 0.64% to 101.65. The selloff spread across the crude benchmark and the refined-product contracts a downstream desk follows.

MyAlgoIndex did not model refinery margins, physical crude differentials or producing basins in this review; it works from the December contract's price and indicator levels. For a refinery or terminal reading feedstock and product values off the screen, Monday's numbers set the reference point, not a margin forecast.

Takeaway: The decline was broad rather than crude-only, and the review stops at the price chart.

Where do the averages and pivots sit?

The composite multi-indicator read stood at 24% sell with weak strength, unchanged from an earlier session, and negative direction led on both directional systems. Monday's settle closed below the 5-day, 9-day, 20-day and 50-day settlement averages, the last for a fourth consecutive session, while staying above the 100-day and 200-day.

MyAlgoIndex reads the bias as neutral to lower beneath the Pivot Point at $87.76 and the $88.50 cash-hours high. A rebound into the $88.50-$89.01 band is the more likely first test, and a stall beneath the $89.01 projection is the base case.

Resistance:

• $92.36 — 50-day settlement average
• $91.42 — Monday's session high
• $90.51 — Pivot R1
• $90.48 — 5-day settlement average
• $89.69 — midpoint of the 13-week range
• $89.01 — 20% raw stochastic projection
• $88.50 — cash-hours high
• $87.76 — Pivot Point

Support:

• $86.85 — Monday's settle
• $86.38 — close of the 4:30 p.m. ET bar
• $86.13 — 61.8% retracement from the 52-week low
• $85.84 — published target price
• $85.02 — Monday's session low and one-month low
• $84.11 — Pivot S1
• $83.30 — one standard deviation support
• $81.36 — Pivot S2

Takeaway: The $87.76 pivot separates a bounce from a continuation, and $89.01 is the ceiling the setup expects price to fail beneath.

What is the primary setup?

The primary trade is a short of the December contract from an $88.40-$88.70 band, around the $88.50 cash-hours high and the $88.48 stall of the 14-day %K line, beneath the $89.01 projection. The stop sits at $89.30, above that projection and below the $89.69 midpoint of the 13-week range.

Targets run in three steps: $87.80 first, just above the $87.76 pivot; $87.05 second, just above the $86.85 settle; and $86.30 third, just below the $86.38 close of the 4:30 p.m. bar. From the entry midpoint, the review puts risk to reward at roughly 1:1 to the first objective, 1:2 to the second and 1:3 to the third.

The 14-day average true range is 4.57 points against a 0.75-point stop distance. A settle above Pivot R1 at $90.51 negates the thesis, and two consecutive 30-minute closes above $88.70 remove the edge before the stop is reached.

The review names the risks: a reported stall in talks with Iran, or a firmer dollar after the inflation data, can carry price through the stop in one move, and a stretched decline is the main risk to a short. That leaves an analyst judgment that "rebounds into the cash-hours high are sold."

Every level in the setup applies to the December contract.

Takeaway: This is a sell-the-rebound trade with a $0.75 stop, and it holds only while price stays under $89.01.

What should traders watch on Tuesday?

The consumer price index at 8:30 a.m. ET is the first scheduled test of the dollar, followed by the Short-Term Energy Outlook at noon ET. Wednesday is the Veterans Day holiday, with CME Globex scheduled for normal hours.

MyAlgoIndex frames Tuesday as a test of two outcomes: a rebound that stalls beneath the $88.50-$89.01 band, or a decline that extends through Monday's $85.02 low toward Pivot S1 at $84.11.

The watch item is the $89.01 stochastic projection, with a settle above $90.51 voiding the bearish case. The next scheduled tests arrive with the 8:30 a.m. ET inflation data and the noon energy outlook, and a headline reporting stalled Iran talks would change the setup before either release.