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Will Oil Reverse to the Upside?

The pressure in equities represents some light profit-taking in the aftermath of a vertical advance. The weakness in bonds continues to reflect renewed economic strength, and stubborn fears of inflation. I suspect that the weakness in commodities is a reaction to the acute back-up in longer term interest rates from 4.48% to 4.90% (a negative for commodities), as well as some general commodity liquidation to raise cash levels across a spectrum of positions.

Let's have a look at the U.S. Oil Trust (AMEX: USO) to see if recent and current weakness has damaged the heretofore promising chart picture.

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