NYMEX Crude Oil Rips on Short Covering Amidst an Otherwise Near-Term Bullish Technical Set-up

Below is what we discussed early this morning about Crude Oil, when it was trading at $44.03.

Since then, Oil pulled back to a shallow corrective low at $43.60, followed by a wicked, upside reversal that has propelled it to $48.09, which also means that the price structure has crossed back above $46.80-- the trendline off of the Dec. 1998 low at $10.32.

The ability of NYMEX Oil to sustain the lion's share of today's gains-- and especially hold above $46.80-- will argue increasingly that the current upleg is heading for $51.20/60 next. MJP 8/31/15 PM

The "good news" is the pattern carved out last week from $37.75 to $45.90 exhibits very bullish form, which if accurate, means that after a brief rest-digestion period, Oil should take off again into another recovery upleg that should head for $48.00-$50.00.

The "bad news" is that the "brief" rest-digestion period could present traders with either a shallow or a deep pullback prior to the resumption of strength.

A shallow pullback argues for weakness that is contained in the $43.30 to $42.20 area, while a deep pullback could press Oil to $40.00 or lower. MJP 8/31/15 AM