Is it a blow-off top?
Spot Nymex crude oil traded above the $90-barrier for the first time since the implosion of the 2008 bubble. Crude oil for January delivery hit an intra-day high of 90.76. It was the highest price paid for prompt delivery since October 2008.
Be that as it may, yesterday’s spike to new highs and the subsequent 2.8% plunge off of those highs create an ugly picture for oil bulls, i.e. a blow-off top.
Put simply, the aforementioned technical signal is defined by a steep, rapid rise in the price path of the underlying asset that is then followed by a precipitous drop in value.
Moreover, last Friday the market traced into an inverse head-and-shoulders pattern with a head of ?$80 and a neckline in the mid-$89s. On Monday, The Schork Report noted that “… a strong move (and close) above the neckline”… cleared a path towards $95!