Based on my intraday pattern work, nearby NYMEX Crude Oil should roll over again and press towards 90.10-89.80 next. Should such a scenario unfold, then I will be interested to see if oil closes beneath 90.55, which its 200-day EMA. That level was hurdled on Monday, but violated again on the downside today (perhaps).

Furthermore, let's notice that oil has come off sharply from its confrontation with the upper channel resistance area at 94.50. The power of the weakness since yesterday suggests strongly that oil could quickly traverse the width of the channel -- into the 88.00-87.50 area -- before we see a resumption of buying interest.

ProShares UltraShort DJ-UBS Crude Oil (SCO) and U.S. Oil Fund (USO) among ETFs to watch.

 

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