Very interesting situation developing in nearby crude. Let's notice that the post DOE data spike propelled prices to $115.69 (so far), which hurdled the August resistance line at $114.80, benefiting our earlier ProShares Ultra-Long Oil & Gas ETF (AMEX: DIG) position. But it failed to hurdle the prior rally peak at $115.95 established yesterday.

This means that today's action fits "inside" of yesterday's range, which to me represents neutral action within the otherwise bear trend if oil prices are unable to break to the upside above $115.95. As the day progresses, if oil prices do not appear to be in a position to hurdle $115.95, I will be expecting a very nasty bout of (disappointed) long liquidation in the aftermath of bullish news -- that drives nearby oil prices to new lows towards $110.00.

By Mike Paulenoff

Mike Paulenoff is author of the MPTrader.com (www.mptrader.com) , a real-time diary of Mike Paulenoff's trading ideas and technical chart analysis of Exchange Traded Funds (ETFs) that track equity indices, metals, energy commodities, currencies, Treasuries, and other markets. It is for traders with a 3-30 day time horizon, who use the service for guidance on both specific trades as well as general market direction

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