Oil hits three-week low. Where it's headed next

WTI crude oil technical analysis:

US oil prices are down $2.09 to $57.34 today, the lowest since April 29. The decline today broke the 21-day moving average for the first time since mid-March and it also declined below the May lows.

WTI crude daily with 21-dma

The fall below those levels leaves little immediate support on the chart.

What's the target?

I wrote yesterday that I was bearish on crude and I'm short. How long will I hold it?

I think Goldman Sachs is right today when they said they expect a return to $45 oil. The market remains oversupplied and US shale producers aren't cutting back as much as analysts anticipated.

I expect crude prices to fall to the Feb highs at $54.50 initially with the 100-dma and 55-dma next. It won't be the same kind of plunge as last time but once the downside momentum begins to accelerate, there will be a rush for producers to hedge.

One thing to add is that I think it's a better idea to wait for a bounce tomorrow than to sell here.