Weak Technicals for Longer-Term Oil

Apart from all the chaos and confusion in the financial markets, one look at the ugly technical condition of the longer-term Crude Oil chart, and we have to wonder if the forces of economic contraction (deflation) are on the verge of becoming overwhelming, or overwhelming any ability of policymakers to do much about the situation?

Purely from a technical perspective, three aspects of the big picture chart analytics are VERY significant here:  First, oil has violated its major support line off of the Dec 2008 low at $32.48, which cut across the price axis at $85.20.  Second, my weekly momentum gauge confirms the lows, and third, prices are "threatening" to close the week right near the 6/04 low at $81.21, and beneath the aformentioned major support line, poised to press directly towards a test of the Oct.2011 low at $74.95.

What does this chart say about demand for oil, gasoline, the US consumer, and the US economy? Nothing good at the moment.  ETF traders may want to keep an eye on the U.S. Oil Fund ETF (USO).