It's the Nature of the Beast Which Counts

On a fairly slow market day, the price action in crude oil is of interest.

The USO, ETF for crude, below on the daily timeframe, illustrates that Black Gold is pausing at prior price resistance. In and of itself, this is practically to be expected--To see "overhead supply" kick in.

However, merely seeing some overhead supply kick in need not mean a major reversal is imminent, or anything remotely close to that. Instead, all overhead supply usually dictates is an initial, expected pause.

And the real issue then becomes the nature or essence of how price handles that supply or resistance. 

In the current example, crude is coming off $10.80 resistance in a benign, orderly manner thus far. Moreover, energy stocks in the XLE are shrugging off any attempts by bears to reverse it lower, even with the Dollar bouncing back and other commodities and commodity stocks coming in today. Energy titan XOM, for example, is clearing the $85 level for an upside breakout attempt. 

As a result, there appear to be better places to seek out shorts, even within the commodity complex, given the nature of this pullback in crude today. 

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