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Waiting for Oil to Reverse to the Downside


My optimal pullback target zone for the PowerShare DB Double Short Oil ETN (NYSE: DTO) is 82.00-79.00, which has been met today.  However, so far the inability of the DTO to turn up with sustainability and leave little doubt that the correction off of the 7/13 high at 99.50 is complete is bothersome, and suggests perhaps that more corrective weakness is forthcoming ahead of my anticipation of a powerful upside pivot reversal.  Let’s notice that there is an unfilled gap from July 2 between 77.70 and 76.15 which might have to be satisfied before the DTO reverses direction (oil prices reverse to the downside).

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