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Crude oil futures have gone on the defensive from a technical standpoint for the first timesince the rally began in February 2009.

Longs should be liquidated as a defensive measure,while the short side of the market should be favored until technical improvement is evident.The Ichimoku chart shows prices trading below the bottom of the cloud for two days now. Thislevel is important as it represents the midpoint of prices for the past 52 days.

The cloud is pushedforward to represent a dynamic support and resistance zone. As most open long positions for thepast few months are now on average, under water, caution is warranted.

Jim Stellakis has over 15 years of experience in technical research and trading; he has focused primarily on the energy and utility complex at investment and trading firms such as Bear Wagner, Touradji Capital, and Millennium Partners. He is currently an independent trader and adviser to buy-side portfolio managers. Stellakis' work focuses on two areas of technical research: relative ratio analysis and price analysis of commodities using Ichimoku analysis. He is a Certified Market Technician (CMT) and holds a Series 86 license (Research Analyst). He graduated with a B.S. in Finance from St. John's University.

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