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Crude Oil (WTI) Review

May 09, 2011 12:42 PM ET
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No signals as yet on West Texas Intermediate    
The news wires are highlighting Middle Eastern unrest as reasons for oil prices to move higher. US oil inventories have been better than expected recently, which has pressured oil values. TheLFB client notes have called for consolidation at support above 95.00. Short signals from 107.50 have completed their course and should be closed.

WTI set up a buy signal but failed to show that momentum would be strong enough to follow through on Monday. Potential long signals are forming, but have not as yet been confirmed. Clients will be notified when price action breaks, and holds.  

Sentiment towards WTI trade remains mixed. Price momentum favors a bounce off support that buys the recent dips. Caution is required in expecting a collapse of WTI below 95.00, or USO (the oil services exchange traded fund) below 37.50.
Price Action:
There was strong buying activity at 97.00 on WTI recently, which is a potential price reversal area of note. This swing point area, where a near-term trend forms and price action reverses previous trade direction, will be closely monitored and signals and alerts sent to subscribers as things unfold.
The daily trading range is $2.70, which are above the historical norm. The 50-day Simple Moving Average is @ 106.40. The 20-day SMA is @ 105.60. WTI has a 36-month 75% correlation to S&P moves, and a 90% correlation to Eur/Usd.

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