As noted below, crude oil will either soon break-out or break-down. With J.P. Morgan supposedly still holding oil tankers at sea, the odds are good that it will be moving up. Such an event should help propel gold to much higher levels, perhaps even loosening the handcuffs in NY.

Regards - VHF

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Will Oil Break Out Or Fail Resistance

B.I.G.

August 20, 2009

At $72 and change, oil is currently trading at a key inflection point. As shown below, oil recently bounced nicely off of the bottom of its uptrend channel, and it is now butting up against resistance that formed when the commodity made its highs in June and July. If oil is able to break out above these short-term highs, there isn't much in the way of resistance until the $90 mark. With oil tracking so closely with the stock market recently, it's highly likely that the breakout will occur if the rally in equities continues.