Crude futures are falling sharply Monday morning after being deflected from the inflection point of our 2nd tier uptrend and downtrend lines. The weakness in Crude follows a decline in the S&P futures after IBM's acquisition of Sun Microsystems appears to have fallen through.

The failed purchase of Sun raises a red flag concerning the health of the economy, and gives investors a reason to take profits after such a large run in Crude. The selloff in Crude is a bit disappointing for bulls since the futures were so close to breaking out of key trend lines and March highs.

Additionally, the decline in Crude this morning is more exaggerated than that of the S&P futures. However, today's drop in Crude shouldn't have investors too concerned since the IBM news isn't critical concerning the state of the overall economy.

Investors will be paying more attention to the earnings season kicking off tomorrow. With economic data release from the U. S. few and far between this week, earnings will play a key role in determining investor sentiment towards U. S. production and individual consumption of Crude.

Therefore, we expect Crude futures to exhibit a tight correlation with the S&P futures throughout the week. On the cautionary side, Crude has just fallen through our 1st tier downtrend line, and it will be interesting to see if the futures can fight back above the trend line today.

Crude remains well above the key $50/bbl mark, and the near-term uptrend is still in play. Fundamentally, we find resistances of $51.73/bbl, $52.05/bbl, $52.46/bbl, $52.86/bbl, and $53.30/bbl.

To the downside, we see supports of $51.28/bbl, $50.80/bbl, $50.38/bbl, and $49.97/bbl. Crude futures are presently trading at $51.53/bbl.

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