Nearby crude oil prices are under pressure again today, and are putting pressure on key near-term support levels at $73.10/00, at $72.75 (9/17 low), and possibly at $72.20 (major trendline from Jan '09 low). While the enclosed chart reflects the nearby contract, which expires today, the continuation pattern remains problematic for the bulls because pressure continues to mount that should test and likely violate the aforementioned support levels.

The multi-month chart resembles a rolling top -- a distribution pattern, where the price structure has recently declined beneath a cluster of relevant near-term moving averages, all of which are starting to roll over into more severely negative angles of descent. To neutralize the potentially negative moving averages -- and avert a plunge towards the May low at $64.24 -- crude oil, and the US Oil Fund ETF (USO), must reverse to the upside very soon.

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.