The time of truth for crude oil prices. If yesterdayââ,¬â"¢s end-month plunge to a new reaction low at $57.02, followed by a potential upside reversal to this morningââ,¬â"¢s high at 59, is a significant low, then the current decline should hold support in the 57.80/50 area prior to the emergence of another powerful rally that takes out 59 on the way towards the top of the October price channel (61-62).

Conversely, inability for oil prices to hold 57.80/50, followed by a decline that breaks and sustains beneath yesterdayââ,¬â"¢s low at 57.02, will be considered extremely negative on a near-term basis, and will point to 55 next.

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.