Oil Drops Sharply, Hits Key Support, 10% Drop If It Breaks

Oil is reversing yesteday's bounce. Just 24 hours ago oil bounced higher on a rumor of Iran possibly being willing to cut oil production. This rumor was most likely an attempt by a hedge fund or big institutions to unload oil contracts prior to a bigger collapse. In my humble opinion, the drop today confirms that was exactly what was going on.

As oil hits the lows today, it tagged a support trend line. Take note in the chart below. Should it break this level, there is a sharp drop that will take place to a target of $43.40.

By Pro- Trader