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Oil Roiled

This is a syndicated repost published with the permission of Slope of Hope. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.

The quotes are pleasantly red this morning – -ES down, NQ down, YM down – but one in particular is getting zapped particularly hard, and that is CL, crude oil, which is down nearly 3%. The /CL contract shows that, after a modest reversal pattern (tinted) oil has been steadily weakening.

Looking at the very long-term oil, augmented with Fibonacci arcs and a Fibonacci retracement, gives us more perspective. Although you would never guess it looking at the gas bumps here in the Bay Area (where gas is still above $4/gallon), oil has been broadly weak for many years.

I suspect the next level of support for crude will be around $50, both because this is the next Fibonacci retracement level but also becomes humans are weirdly hung-up on Big Round Numbers.

Should oil find some strength there, some energy companies offer an opportunity for a strong bounce. Schlumberger, for example, is right near the bottom of a well-defined range.

As for my portfolio in general, I’m more aggressively positioned than I’ve been in over a week, with 57 short positions and a 184% commitment level.

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