Wednesday, July 19, 2006

Crude Oil

Here is an hourly chart showing pit and electronic trading in September crude oil futures. I am switching to this contract today from the August contract. September is trading about 1.80 over August. I last commented on crude oil here.

In this morning's guesstimate I said that weakness below the 75.00 in September crude oil would tell me that an extended drop has begun. As you can see the market has broken well below the 75.00 level today so I think it is headed for 69.50 which is roughly the 7 and 1/8 multiple of the 1986 low at 9.75

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