Nearby NYMEX crude oil futures have the right look and the requisite underlying internals to suggest that yesterday's low at 93.42 and this morning's low at 93.81 ended the decline from the July 26 high at 100.62.

If that proves to be the case, then as long as 93.75/42 remains intact as key support, oil -- and the U.S. Oil Fund ETF (USO) --- likely is starting a recovery rally. That rally should revisit key resistance at 98.00-98.60 in oil futures, which, if hurdled, will trigger upside continuation to 100.00 for a test of the July highs.

Wouldn't that be perplexing while everyone is fixated on the potentially intensifying global economic slowdown?

 

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