I won't claim to be an expert in technical analysis but I do know a bit more than the average person about it. I also know the classic signs of a top.
Crude oil futures swung wildly Monday, rising to a record and then tumbling as investors wrestled with whether they should put stock in Saudi Arabia's promise to boost production. Retail gas prices rose to a national-record $4.08 a gallon.
Light, sweet crude for July delivery fell 25 cents to settle at $134.61 a barrel on the New York Mercantile Exchange after earlier soaring to a trading record of $139.89. Earlier, it dropped as low as $132.84.
What we have here is an important technical milestone - $140. We hit it and immediately retreated and closed at a loss for the day. This is usually a classic indicator or a top when you are talking about a speculative instrument.
From here we should drop more - but it will be choppy. Many traders will sell any rally here and every time oil rallies the speculators will jump on board thinking we go higher. The reason it's a top is that the ones that jump back in will lose money because the others are taking profits on every pop. After the speculators who jump in on the pops lose enough times they will stop buying every move and start shorting every move up.
Of course outside events such as an event with Iran can make it go way higher - but that's considered a news move rather than a technical move. And what we've had here for a long time is technical speculation.
There is only so long a bubble can last - look at how the stock bubble popped, the money moved into real estate and then that bubble popped - and finally moved into oil.
My opinion only - please don't invest based on it.