Wednesday, April 19, 2006
Today I am switching from the May contract to the June contract in crude oil futures. June is trading about $1.90 over May. Here is an hourly chart of the June contract.
I had been thinking that the August 2005 high at 70.90 would hold. I was wrong about this and the issue now is whether or not the breakout above 70.90 will soon be reversed.
I think there is a lot of bullishness in the market for crude oil and that there has been for the past 8 months. There is strong resistance nearby. The 74.34 level is the 7 5/8 multiple of the all time low in futures trading at 9.75 in 1986. The 75.90 level is the 1 7/8 multiple of the preceeding all time high at 40.50 in 1990. I think that the break above the 70.90 level will be short lived and that the market will soon drop $ 15-20 from current levels.