February Crude oil –Monday’s new high was preceded by a three-day corrective pullback that had formed a potentially bullish reaction swing. Crude traded above the prior swing high (91.88 posted on December 27, 2010) but failed to close beyond the 91.88 high. Instead, the market pulled back inside the swing pattern and closed near the low of the daily trading range. This type of price action is a warning that the market is losing momentum as it approaches the January 4th reversal date and could be vulnerable to a swing pattern failure. The warning proved to be correct as Crude opened steady before collapsing and moving substantially lower. I look for the market to make a corrective rebound into the sell zone of 90.57 to 90.87, over the next couple of day. This corrective rebound could set up a new selling opportunity or a good location to add to your current short position.
I will have updated information and new swing trade recommendations in the next issues of the Traders Market Views Swing Trading Report. www.tradersnetwork.com
