Oil Tanks! Key Levels To Watch

Oil futures plunged back below 70 as traders returned from the holiday weekend. After taking out the psychological 70 threshold, bears managed to test the 69.15/35 zone, where the mid-May low and the key 50% retracement lie. Additional weakness would expose the 61.8% retracement just under 68. With an agreement in principal, the debt ceiling drama looks to be be in the rearview mirror. It seems traders have fully priced-in the beneficial news as stocks traded off their pre-market highs and finished slightly lower on the day. ES futures were able to reach new highs, but failed to maintain those gains. This is welcoming price-action for ES bears who loaded up on short positions last week according to the CFTC. And, interest rates and the US dollar continued to pare back recent strength for the 2nd day in a row.