Crude bounced off our 1st tier uptrend line beautifully yesterday after a massive selloff in reaction to the possible bankruptcy of GM and Chrysler. As we stated in our previous post, the failure of the major U. S. auto manufacturers takes a large bite out of demand from several sides.
Higher unemployment implies a reduction in automobile purchases and consumption of crude. Additionally, we must consider the crude utilized to both manufacture and distribute the automobiles. With the S&P below 800 and global consumption and production levels coming into question again, there were sufficient reasons to send crude futures tumbling lower.
Rate fails at support and clears large stops under 1.3200; rate likely has stops building in both directions but shorts have taken control of the market as the rate gives back gains over the 1.3400 area last week late. Action remains two-way; stops under 1.3150 area said to be building in size but the rate recovers from low prints off the 100 day MA suggesting the move lower is likely supported on dips. 
Rate falls through stops into support around the 1.4100 handle overnight; traders report more stops waiting under 1.4100 with bids around 1.4050 for the day. Rate recovers back to the 1.4200 handle late as late shorts fail to get a foothold. A close back under the 1.4250 area argues for more losses but support is solid around 1.4100 so aggressive traders can buy dips. 
