Crude Oil

Here is a condensed hourly chart of pit and electronic trading in May crude oil futures.

The market has rallied to very strong resistance at 69.50, the 7 1/8 multiple of the 1986 low at 9.75. It is also just a shade below the tops at 70.90 in September 2005 and January 2006. This means that if the market falls from here as I expect it to we will be seeing the second lower top on the monthly bar chart and a triple top to boot, a very bearish configuration.

Will the market drop from here?

So far there is little evidence based on the swings up from blue point C. The drop from black point l at 69.45 is not yet longer than the preceeding two breaks j-k and h-i. But as I mentioned above resistance above the 69.00 level is strong so I am betting that the drop from the high at l will break the low or 66.15 at k. This in turn would mean that the whole move up from 60.20 is complete and that a big break below 60.00 has begun.