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 (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.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.