This selloff is the real deal: Crude oil is getting zero help from a weaker dollar, as the market is in full liquidation mode, and is down another $1.50 on Wednesday morning.
In early Wednesday trading, crude has dropped below $96.50, and has blown through most major support levels below $100 just this week. The next major level of support comes in at $94.75.
(Read more: Crude hit by renewed supply worries, this time in China)
Traders await the second report coming from the Energy Information Administration this week. The prior report was delayed until Monday, but this one will be at its regularly scheduled time of 10:30 a.m. EDT Wednesday. The prior report showed that crude inventories rose 4 million barrels in the week ending Oct. 11, which was well above analyst expectations. With inventories building week after week—and this being accompanied by a hit in growth caused by the government shutdown—the path of least resistance remains lower.
(Read more: Dennis Gartman: Crude oil heading to $85 per barrel)
The high in early Wednesday trading is $98.29, and only a close back above here will put a halt to the immediate-term bearishness. A close below the $97.61 to $97.78 level will keep this bear leg fully intact, as it looks like $90 could come in as a psychological support. But at this pace, a trade down to $90 shouldn't shock anyone.
—Rich Ilczyszyn is founder and CEO of iiTrader. Follow him on Twitter @iiTrader.
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