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Oil's Mysterious Plunge


No one seems to know why oil prices plunged yesterday. It remains a great mystery.

If it was not a flight in response to rumors about a release of oil from the SPR, or a renegade trader in a panic, then just maybe a big fund decided to lighten up on a low-volume, holiday session because someone in the brain trust figured the Israelis would not attack Iran on a Jewish holiday?

And since the holiday extends until after September 26, why risk holding such a large long position for the entire 10-day period?

I have no idea as to whether that is the reason, but it is one of the best explanations I have heard.

Meanwhile, my pattern and momentum work argue that Brent Crude Oil (OILB) remains vulnerable to a revisit of yesterday's low at $111.50, which, if violated, will point towards the $108 area thereafter.

Only a climb above $114.80 will neutralize current downside vulnerability.

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