My technicals keep warning me that crude oil hit a significant peak at $114.83 on May 2 and since then has embarked on a major correction that is only partially complete. In fact, all of the sideways, recovery action off of its May 6 corrective low at $94.63 represents a bearish rest-digestion period that should resolve itself to the downside in a plunge that projects to 90.00-86.00, and then to 80.00-78.00 thereafter.

ETF traders may want to be cautious of the US Oil Fund ETF (USO).

Only an upside reversal and climb above $104.00-$106.00 will neutralize my negative outlook.

 

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