There has been no ending sight to the crude oil advance. From $70 per barrel in September 2007 to $142  today, oil has been on the steady rise along with extremes that we saw in the past few months. It has gone through all technical targets on the upside, and we are nearing a major psychological target of $150. In times like these, nobody knows what will happen next, and whoever claims to know is full of crap (excuse me for the technical term). Thus, I would not be gambling with crude and would stay on the cautious side rather than being aggressive.

Based on the chart below, there are no signals of crude easing off; in fact it is consolidating at the highs, which is usually pretty bullish.  I think we will definitely test the $150 level before we can see any major move to the downside.  As you can see from the chart, we are in the up trending channel and the top of the channel is $150. On the other hand, we do see some divergences in the MACD and overbought RSI on the weekly charts. Also, we are coming into a “squeeze”, meaning volatility is decreasing and momentum is decreasing on the upside, so any move outside of the squeeze should be significant. I personally would not initiate any shorts because of divergences or overbought indicators, but I would advise to be cautious.