From a near-term perspective, the August advance in the UltraShort DJ-UBS Crude Oil ProShares (NYSE: SCO) has climbed sharply to and actually pierced above its May-August down trendline today at 14.85/90. Perhaps more impressive is that the price structure is consolidating (so far) above the trendline, which is a potentially bullish sign of still more upside directly ahead, that projects to 15.25, and then 16.25/50 thereafter.

Should such strength emerge without much if any pullback, then the intermediate-term picture will morph increasingly into a multi-month accumulation (base) pattern that is propelling prices towards a confrontation with significant resistance at 17.50-18.00. At this juncture, let's not be surprised if a bit of profit-taking occurs that corrects the near-vertical August upmove into the 14.60/20 area prior to the resumption of strength that propels the SCO considerably higher.

By Mike Paulenoff

Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

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