As I predicted, last night's API build served again as a short-covering signal. We're seeing a lot of technical signals pointing towards the 32.50ish level. Keep an eye on this level. One of these signals is the neckline of a possible H&S formation. I'm still a major bear on oil, but don't currently have an open position. Short-covering is fully in force. As I mentioned last night, a technical rally is a welcomed move, making it more easily digestible to plumb to new lows. I plan to wait for the buying strength to fade with an eye towards re-entering a short position at the 32.50 level with a target at 28.25.
