20080923 Here is the deal. In the past couple of months, we have seen this drop in equities worldwide and commodities as well. What was happening was the big investment banks, because of their exposure to the sub prime CDs and credit default swaps, all exhausted their capital. Hence they underwent the process of 'deleveraging' and asset liquidation to improve liquidity, causing the massive contraction in equity and commodity prices. Since last Friday and last week's events, where the 5 investment banks now became the two, there was a massive 'cut loss' (Bear Sterns, Lehman, Merrill Lynch), followed by the US rescue package. Thius the events causing the massive selldown is diminished somewhat paving the way for equities and commodities to regress towards their mean.(true value) We see a 50% retracement form recent lows for commodities.

Crude Oil futures chart

20080923 Had no idea how to trade this V shaped reversal on the crude oil futures. Maybe the sell down was caused by Goldman Sachs cutting its futures long positions.(remember their 'super spike' view on the crude oil) Anyway, the only trade on offer is to wait for a retracement to re touch the downtrend line, which is now broken to the upside, for the long trade.

Crude Oil futures chart

20090919 Resistance of 112 could be tested in the days ahead.

Crude Oil futures chart

20080916 The trend continues and accelerates in the crude oil futures. Missed this fast and severe move. Might well be the market to go sideways in the next week or so.

Crude Oil futures chart

The inverted head and shoulders pattern did not trigger, and the downtrend in crude oil resumes... Waiting for the next pattern to develop.

Crude Oil futures chart