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Pro: Crude Could Soon Plummet

Crude oil has had a choppy ride over the last of couple days, but this is a phenomenal market to play using technicals.

The wall has been $94.45, which is the 50% retracement on the year, and a close above that level is needed to spark a potential breakout. Since then, though, crude has found major support against the 100- and 200-day moving averages at $92.60 and $92.45.


Although the market has tested just below those levels, a close below them is needed to spark bearish movement, and that would create a very negative chart setup.

So what are we watching to gauge the momentum in crude? It's simple: equities and the dollar. These will continue to be the two major movers for the market, especially with today's data.

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With the dollar index above 83, crude will find it very difficult to trade above and through $94.45. Look for a close above 1552 on the S&P 500 to be bullish -- but on the other side, a failure in the S&P below $1536.75 will encourage selling in Crude.

If you want to play the short side of crude, consider the May crude 90-stike put options for $750 total risk. This will give short crude exposure until April 17th, when the options expire. The $90 area was recent support. and would be a downside target if the market starts to sell off.

Just food for thought! Good luck and good trading

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