Ya Think the Bias Is Bearish

Weekly Continuous

More often than not a price spike with a significant contribution from short covering is followed by a price vacuum once the buying that caused it is exhausted, and at least a retracement of the gain. A decline of $.794 (nearly 25% of price at last week’s close) would be considered outside the range of expectations of this analyst. Rather than opening higher after the three day weekend, February was immediately offered $.20/dt lower. There was no gap because of the wide daily ranges of last week’s rally, but the best February could do was a trade to $3.189 ($.124 below the previous Friday’s well – bid close-which turned out to be the high for the week. There was a short – lived bounce off the 50 – day SMA but nothing that resembled one at the trend line drawn from the December lows, which I had thought would guide success prompts higher. Nope- February fell unabated through multiple levels of conventional, moving average, trend line and moving average support. By the week’s amply offered close , prompt gas had returned to the band of weekly closing support ($2.469 – $2.548) that has limited every decline since the recovery from the June low.

While volume was lower during the decline last week — I guess you could consider it kind of a dubious positive technical factor. Although less than a week earlier turnover was higher than average. It also certainly appeared that surviving speculative short sellers returned with a vengeance…open interest for the three trading days between Tuesday and Thursday (open interest statistics lag one day) increased 28,363 contracts. Were just setting up for the next round.

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