Bearish Digestion Period for Crude Oil
Commodities / Crude Oil Jun 02, 2011 - 05:05 PM GMTBy: Mike_Paulenoff
My technicals keep warning me that crude oil hit a significant peak at $114.83 on May 2 and since then has embarked on a major correction that is only partially complete. In fact, all of the sideways, recovery action off of its May 6 corrective low at $94.63 represents a bearish rest-digestion period that should resolve itself to the downside in a plunge that projects to 90.00-86.00, and then to 80.00-78.00 thereafter.
ETF traders may want to be cautious of the US Oil Fund ETF (USO).
Only an upside reversal and climb above $104.00-$106.00 will neutralize my negative outlook.
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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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