Oil has enjoyed a stellar run over the past three weeks. But if you buy now, you better exercise a great deal of caution.
Crude oil showed signs of continuing its surge into the close on Friday, recovering more than $1.50 from its lows to close at $106. However, the market was falling back once again Monday morning, after China reported its second-quarter GDP growth came in at a somewhat discouraging 7.5 percent. A solid retail sales number out of China—up 13.3 percent from the previous year—is tempering that bad news.
(Read More: China's economy slows for second straight quarter)
The dollar has been having a positive morning, and we are looking to see the Dollar Index cover the gap at 83.75. The major level to watch at the close will be 84, as a move up to here will put pressure on commodity prices.