The late session drop in spot crude has saved the stock market indexes from breaking down lower today. Right around 2:00 pm EST spot crude began to decline sharply lower before closing and settling at $97.30 a barrel on the New York Mercantile Exchange at 2:30 pm EST. In electronic trading crude has declined a bit further breaking below the $97.00 levels.
This morning we had mentioned that crude and the major stock indexes were and are trading inverse to each other. Many traders and investors will follow and trade the United States Oil Fund (NYSE:USO). This oil tracking ETF will some minor intra-day support around the $39.00 level and more support around the $38.50 area.
The United States Gasoline Fund (NYSE:UGA) also staged a sharp reversal this afternoon after making a new 52 week this morning. The UGA will have intra-day support around the $46.50 and $46.00 levels. Please remember oil and gasoline are reacting on the geopolitical events that are taking place around the world. Both the USO and the UGA are extended on the daily charts.