Crude Oil Slips - Market Analysis for Oct 23rd, 2007

The XLE (Energy Select SPDR) has gone straight down to 73.55/50 since we managed to sell short above 74.00 in our model portfolio about 20 minutes ago. Crude oil is plunging as well, and my work is telling me that this decline is more than your run of the mill dip to buy. My near- and intermediate-term work in crude oil is warning me that prices have established a major peak at $90.07 and that the price structure already is in the midst of a significant corrective process that initially should press prices to the $81 area to test the Aug-Oct support line, likely on the way to $76-$73 thereafter.