Crude recovered some of its losses yesterday as U. S. equities posted solid gains on the session. However, the stabilization is proving temporary as the futures head south again today.

We've noticed a considerable spike in volume recently, likely due to bulls taking advantage of what they view as oversold conditions. Despite buyers coming to the forefront, the futures have made a clear commitment to the downtrend by setting new Aprils and bidding farewell to the important $50/bbl level.

The downtrend is really taking hold today as the 30 Year T-Bond futures look to fall beneath 4/20 lows. Volume is picking up and we notice a tight positive correlation with U. S. equities. The pressure remains to the downside as the 30 Year futures trade well below our 2nd and 3rd tier downtrend lines.

The futures are headed towards fundamentally significant territory, particularly March lows. Though the lows seem far away right now, they could be reached faster than one may anticipate. The negative performance of the 30 year creates an interesting scenario.

Rate has inside-range day so far failing to extend to a new low on follow-on selling overnight; rate reaches to tech support around 1.2880 but traders say conditions are still on the thin side. Rate has two-way action into the lows suggesting short-term traders and profit-taking by the shorts.

Support at or around the 50 day MA now being tested; the 50 day MA is next level needed to hold for the bulls to feel comfortable this week. Need a rally back over within 72 hours for the drop to be considered a correction and not a breakout.

Rate extends briefly into the 1.4400 handle and rallies out as shorts cover; stops over the 1.4620 area are large lifting the rate to new highs. Holding firm into the close more upside is likely overnight. Stops said to be building above the 1.4720 area after rate clears close-in stops.

Tests of the psychological 1.5000 area now complete with the pullback likely about over. Rate likely to find buyers on any dip to the 1.4500 area as this was the breakout area. Rate is still holding the 100 day MA nicely and aggressive traders can look to buy dips.

The USD ends mixed today after reaching critical S/R numbers after the open and ahead of the London fix. The BOC announced a 25 BP cut in interest rates lifting the USD/CAD sharply higher as stops over the 1.2400 area fired off topping the rate at 1.2509 before cooler heads prevailed. The rate fell back as late buyers were disappointed finding sell-stops in-range bringing the rate back under the 1.2400 handle eventually making a new low on the day at 1.2324; traders now feel the rate has completed a retracement against the recent weakness and with an inverted hammer formation on the daily charts more losses are likely.

The S&P futures have really taken a turn for the worst due to the combination of the realization of nationalization combined with disappointing earnings from corporate bell weathers.

The words `credit crisis' are re-entering headlines sans the word `solution'. The futures are struggling with our 2nd tier downtrend line as investors search the market for positives. Though it's safe to say the uptrend isn't lost with April 8 lows and 800 intact, the S&P is certainly flirting with dangerous territory.