What's the potential downside in WTI crude oil

The market is nervous about the OPEC meeting on Wednesday. WTI crude prices fell $1.78 to $45.30 on Tuesday on signals that Iran and Iraq may fail to sign the deal.

The October lows briefly broke earlier this month but all that did was set up a head and shoulders pattern. The neckline is at $42.00.

A break would target $35 and I think that's a realistic endpoint if OPEC crashes and burns. But some of it depends on the rhetoric on the way out the door. If they punt and talk about a deal in January, it might not get that bad. But if Saudi starts talking about flooding the market, then the downside could be into the low $30s.

In any event, the first big level to watch on Wednesday will be $42.