Tuesday, September 27, 2011

Mike Paulenoff: Is Crude Oil Readying for More Downside?

If you are a regular reader here at The Crude Oil Trader you know that we share our numbers as well as the numbers and trades of other great traders and investors. We base our trades and views on the combined opinions of numerous trader/writers, and so should you. Today we would like to bring Mike Paulenoff into the mix.....

As of this moment, my optimal scenario for the nearby NYMEX oil price calls for a period of stability and/or a recovery rally that grinds into the 80.50-82.00 resistance area prior to another downside pivot that presses the price structure to new lows beneath 75.71 on the way to 70.00-65.00 thereafter.
At the risk of missing such a downleg in the absence of the anticipated recovery bounce, I will watch from the sidelines for a while longer prior to deciding if I should commit funds to a short position -- in the ProShares UltraShort DJ-UBS Crude Oil (SCO),  into NYMEX price weakness (though always a hazardous strategy to short oil into weakness).
That said, only a rally that sustains above 82.00 will neutralize the imminent threat of another plunge in oil prices and the U.S. Oil Fund ETF (USO).

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