News / Commodities
Crude oil futures jumped more than $16 a barrel last Monday, recording the biggest one-day gain in dollar terms since 1984 (when crude began trading on the New York Mercantile Exchange). Factors that contributed to the spike: - Steep drop in the U.S. dollar
- Increasing hope that the U.S. government rescue plan will serve as a backstop to the current financial crisis, thereby helping improve the economy and boosting oil demand once again
- Short-covering related to the expiration of October crude contracts
The price spike last Monday broke the minor resistance line. A rally was half-expected (just not a one-day $16 jump!) as the MACD blue line has curved up again and the RSI has been in the oversold level for most of September. It really was just waiting for a catalyst. The next resistance is the 200-day moving average. This average supported crude prices last month. As we all know, support and resistance lines reverse roles once they are violated. So is it back in the quagmire of high prices at the pumps again? Oil seems to be a major safe haven for many investors for now but let’s see what happens first after the U.S. rescue plan gets going. Current support is at $90. 
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