Massive Short Covering Rally in Oil: Trade Accordingly

NYMEX:CL1!   Light Crude Oil Futures
There's been a massive short covering rally of near historic proportions in oil recently. As the OPEC circus continues to 'cry wolf' regarding freezing production, the market, once overwhelmingly short on the commodity, takes the opportunity to cash out some of its short positions.

There is really no fundamental reason for oil to rally so hard as the attached article cites. Further, note that the OBV does not indicate any true buying pressure that would warrant such a correction. In fact, it still demonstrates quite a bit of selling pressure, an extreme divergence with price.

Further, note the bearish gartley pattern. It is not quite fully complete. But when the price hits anywhere from $40.30-$40.98 (as the pattern has been drawn to anticipate), we'll see almost perfect fulfillment of the ratios. Note further that this level happens to align with a strong fibonacci level on the fibonacci extension (if X-C is to correspond to the 50% fibonacci level).

Finally, we see that the 100 period Aroon indicator still notes that we are in a long term downtrend, and the MACD looks due to change directions and head toward a crossover into negative territory. The RSI is very close to indicating overbought conditions as well, to indicate a near perfect setup for a mean reversion short in and of itself, let alone the data cited above.

Look for it to retrace at least to 23.6% fibonacci level, if not to fully retrace and visit the $20 handle once again.
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