Oil U.S. Light Crude Futures ($61.04)

In my Market Comment on February 1st 2006 I called for a general market setback, including resource stocks. Light crude has sold off by almost ten percent since then. Now, we are approaching an important short term support area ... round-numbered support at $60, along with 200-Day Moving Average support, and uptrending technical support, all of which are convergent on the $60 area. To my way of thinking, this hints at the possibility of a knee jerk bounce from the $60 area as we move into the month of March.

Are we gradually building an important long term top below the $70 area? So far my unique long term price momentum models suggest a possible long term top formation, but no trend reversal is indicated as yet. A pause rather than a reversal? The jury is still out, but even a pause here has important investment implications.