Crude futures are tanking, collapsing below our downtrend lines and our 2nd tier uptrend line. In fact, the futures are headed back towards the highly psychological $50/bbl level as the S&P futures plunge below 800.

The governmental rejection of GM and Chrysler is having a clear, profound effect on the price of Crude. The swift downward movement is understandable since the possible bankruptcy of America's major auto manufacturers attacks the demand side of the equation on several fronts.

First, the bankruptcy of GM and Chrysler would imply a systemic shock to unemployment, reducing demand and the consequential consumption of crude. Secondly, higher unemployment and tight credit means less new cars on the road, cutting another chunk out of demand.

Finally, the collapse of the auto makers could send U. S. equities into a tailspin, damaging global economies and impacting international demand of crude. Least we mention Crude Oil Inventories have come in above expectations for four straight weeks.

Regardless of the sudden turn towards negativity, investors will likely put up a fight around $50/bb considering its significance. However, if $50/bbl doesn't hold then we could witness a drastic decline in crude futures.

Fundamentally, we find resistances of $50.41/bbl, $50.79/bbl, $51.29/bbl, and $51.78/bbl. To the downside, we see supports of $49.81/bbl, $49.49/bbl, $49.01/bbl, and $48.51/bbl. The crude futures are presently trading at $52.36/bbl.

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