It will answer the following questions for us -
1. Is this current rally counter trend or another impulse move?
If this is a counter trend move, then it should reverse down right here and it certainly should not take out the contract highs.
2. Is the all time high at 98.70 a major high or simply another stop on the course to higher prices.
If crude prices turn lower here, we can have a pretty high probability that the 98.70 level is at the very least an intermediate term peak and should prices continue lower for more than 17 days without a new high then we can begin to see 98.70 as a potential long term high.
The Big Boys are very heavy net sellers and seem to be saying that the major bull market in crude is at or very near its end. However, while this is the heaviest commercial selling we have seen in quite a while especially when we factor in option positions as well the price action of the commodity is going to be the telling sign of what lies ahead for Black Gold.
We are entering into a very interesting period here so stay alert to potential trade opportunities.
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