Although the vast majority of my technical work tells me to expect crude oil prices to hold at the $57 level (the 51 area in the USO), tomorrow's release of the latest energy inventory data could trigger whipsaws in both directions, which I intend to avoid. But after the data are released, if I have an opportunity to add to my current model portfolio long position below 52.00 in the USO, I will do so at that time.

Looking at the chart of the hourly December crude oil futures, we see that crude prices have reversed with a vengeance from a new long at 57.02 to 58.80, or about 3%, in what seems like a matter of minutes. And the upmove occurred ahead of tomorrowâ�,��"�s energy inventory stats!

In any case, the action shown on the chart is technically classic in that prices plunged beneath the lower channel support plateau at 57.60â�,�”to 57.02â�,�”prior to pivoting to the upside.

Most of the time, a major low or high is established after prices thrust above, or plunge below, an intermediate-term channel line. In this case, the Thurs-Tues nosedive from the top of the channel through the bottom of the channelâ�,�”followed by a powerful upside reversalâ�,�”argues strongly that we have seen the final capitulation in oil ahead of a period of recovery.

Such a low would appear to have played its hand today.

Similarly, gold appears to have bottomed. After yesterdayâ�,��"�s pop to new recovery highs at 60.65, the highest price since the early September Amarinth debacle, the GLD has pulled back and pivoted off of 59.50 this morning, and since has popped back above 60.00 in what looks like the end of a minor correction and the start of a new upleg.

A hurdle of 60.65 should trigger upside acceleration towards my next optimal target zone of 63. Only a decline that breaks and sustains below 59.00 will compromise the current very constructive near-term outlook.

Meanwhile, on the equity side the risk seems to be about tomorrow -- what the funds do on the first day of the new month. Based on my technical work, I intend to remain long the QID (UltraShort QQQQ), and short the Dow Diamonds (DIA) hopefully into the Nov. 7th mid-term election.

If the election was a major reason why money flowed into the stock market since July, that reason will be removed on Nov 7. So, whether the outcome is that the Republicans hold the majority, or whether the outcome is that Bush is a lame duck dealing with a split Congress, the fact of the matter is that whatever the money was chasing into the election, the election will be over, and that big market move discounted the impact of either a renewed Republican majority or a split Congress.

So my sense is that in and around the next week, the long positions that have been established between July and October need to be protected, even if it is in reaction to a sell-the-news scenario.

Looking at the 4-hour chart of the DIA, although the DIA recovered during the final hour of trading, it remains below its Aug-Oct trendline, which it violated yesterday, and stayed below for todayâ�,��"�s session. The decline so far, from 121.68 to 120.12, has the â�,��"right lookâ�,� of a complete initial minor downleg of a developing, larger corrective process.

Now that October is over, and with the start of a new month â�,�“ the first couple days of which usually are accented to the upside â�,�“ we will find out shortly if the weakness off of last Thursdayâ�,��"�s highs into this afternoonâ�,��"�s low was merely a pause prior to another thrust, or alternatively the beginning of a larger correction.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.