Oil in Bullish Pattern, though Comparison to Dollar Warrants Caution
Mid-Day Minute for Mon November 9th 2009
by Mike Paulenoff, www.MPTrader.com
by Mike Paulenoff, www.MPTrader.com
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Although oil prices are up about $1/bbl this morning, given the juxtaposition of the dollar index pressing against its October low (see our comparison chart of oil and the dollar), a holder of long positions in oil and the US Oil Fund ETF (NYSE: USO) could be disappointed. That said, I am also mindful of the fact that Friday's weakness can be construed as a successful test of critical support at $76.55, and as long as $76.55 contains any forthcoming weakness, the near-term pattern in oil argues that a three-week bull flag should thrust to the upside in the upcoming sessions – towards a target of $86-$88.
