In Reaction to the EIA Inventory Report, Oil Plunges to Retest June Double Bottom Lows

The time of truth for Crude Oil, in the aftermath of a "mildly" disappointing EIA Inventory Report, prices have reacted disproportionately to the downside, giving back nearly all of yesterday's rally from $45.92 to this morning's high at $48.25.

If yesterday's low is violated, and if the prior two June lows at $45.83 are violated, Oil will find itself vulnerable to downside continuation quickly to the $43.00 area.

Conversely, as long as the $45.92-$45.83 series of June-July lows remains intact, my near- and intermediate-term pattern work argue that Oil is finishing a June-July bullish digestion period ahead of another powerful upleg.