What a difference a day makes. In the past few hours, since the energy stats were released, prices have rebounded from new reaction lows at $56.70 to $58.25. In the next 70 minutes, if crude prices continue to rally and close above $58.40, then today's action will be considered a key upside reversal, which is a signal that the decline from the Katrina high at $70.85 has hit its first significant low within the beginning of a base building period. Inability of crude to close above $58.40 will leave us with a weaker reversal signal, one that usually ushers in a recovery rally ahead of another downleg. In any case, right now it appears that crude has found some sort of meaningful near-term low at $56.70. Any rally effort will hit resistance at the 200 DMA, now at $59.21.

MJP 11/16/05

Mike Paulenoff is a 25-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his E-mini S&P and QQQQ technical analysis and trading alerts. For more of Mike Paulenoff, sign up for a FREE 30-Day Trial to his E-Mini/Index Futures diary, or try his QQQ Trading Diary.