Crude: Accumulate closer to 58-60/ in the next two + week.
A sharp decline from 77 to 61 ---clearly catches the attention of both bull and bears. Given a bearish stance on crude, I am glad to see this decline. I must say as a rational investor this downside action is highly surprising.
Near-term recovery pending as stated last week but clearly buyers are stepping away and selling near-term bounces. At this stage, looking for consolidation with worst case scenario of $58.
One has to look at current levels closer to February 2006 and October 2005 levels to get a clearer long-term perspective.
Again crude did go from 20 – 70 and that move is still intact. I wonder if the summer mid-east conflict was a key contributor to a climbing irrational move closer to$77.
Perhaps, $68 is the key resistance level and $58-60 is an area of interest in the next two weeks.
Net/Net: Next two weeks I would stay away from this trade and find further downside extremes. Then one can step in and accmulate or bail out of a trap.
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