Eye on Oil - Market Analysis for Jul 2nd, 2012

Although it is not surprising that oil has pulled back 3% from its Thu-Fri upmove of 10%, and although a vertical move of such power usually has tailwinds that propel it still higher, my suspicion is that because my intermediate-term work remains bearish we should allow nearby oil to correct more of its recent upmove prior to entering new long positions.

Right now, I am looking for nearby oil to press into the 81.30-80.50 target window prior to entering the long side equivalent of the U.S. Oil Fund ETF (USO). My preferred buy window for the USO is below the market at 30.50/20.