Corey Rosenbloom at Afraid To Trade has a good breakdown of the somewhat divergent technical picture for the major indexes. I have a more bearish take, but agree the picture is far from clear.

I think oil has a better chance of going up than down this week, considering support around 90.00 and the ascending 200 day moving average beneath.



As we see world events unfold, it is worth reflecting back on words of chess champion and political dissident Garry Kasparov from October 2007:

And now, Putin is basically spitting in his (Bush's) face by making this open friendship with Amadenajad, but it was obvious from the very beginning because Putin has only one item in his geopolitical agenda: He needs high oil prices, and tension in the Middle East helps him keep oil prices at an all time high, so that’s why he sells nuclear technology to Iran, sells missiles to Hezbollah and Hamas via Syria, because it helps him stay in power. If the oil price goes down, Putin’s regime goes down, and I’m surprised the White House didn’t recognize it in time.

President Bush has often been ridiculed his comment on gazing into Putin's benevolent soul. As Chris Matthews asked, "Do you ever get the idea that they’re playing chess and we’re playing checkers?"

The Baku pipeline in Georgia carries a minimal amount of world oil supply. However, with crisis and conflict in abundance these days, my oil-related trades will be of short duration and with tight stops in place. If traders start driving the price of oil higher this week, here are a few trades I'll be considering:

- CLR: This O&G exploration company had good news lately out of its Bakken shale oil development. It saw good volume during this bounce, and has a rising 200 day moving average to support the recent low.



- ARD looks good over the 50 day moving average.



- PDO: Big price swings here.



- UAUA: Several of the airlines looks like potential shorts here. Although they are generally trading inverse to oil prices, many have fundamental profitability issues that won't be solved even if oil drops to $100 per barrel. From 2.80 to 12.70 in one month, at some point UAUA will need to give up some of these gains. Note the trendline break.