Crude futures shot higher yesterday on impressive volume despite weekly inventories coming in slightly higher than expectations. Even though the number missed, inventory levels were still an improvement from last week's rise of 2.8 million barrels.

Crude futures proceeded to muscle through our 1st and 2nd tier uptrend lines and rallied past the highly psychological $50/bbl level in the process.

Despite the strong rally, the futures were deflected by our 1st tier downtrend line while backing away from 4/7 highs, indicating the downtrend continues to pull its weight.

A battle between trends could ensue in the next 24 hours as our 2nd tier uptrend and 1st tier downtrend lines reach an inflection point. The importance of the moment is reflected on Wall Street as investors debate whether to keep the uptrend alive or self-destruct into the crisis freefall.

Though we have a good idea of where supply stands with weekly inventory releases and OPEC standing pat, the demand side of the equation still produces a glaring question mark.

Corporate earnings and projections will play a large part in determining the path of crude as investors look for clarity regarding the outlook for production and consumption.

We expect crude and equities to continue to walk in lock-step with the positive correlation in full force. Fundamentally, we find resistances of $48.21/bbl, $48.74/bbl, $49.28/bbl, $49.72/bbl, and $50.20/bbl.

To the downside, we see supports of $47.72/bbl, $47.32/bbl, $46.89/bbl, $46.42/bbl, and $45.92/bbl. Crude futures are presently trading at $48.04/bbl.

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