As you’ll recall, we told you all back on 6-11 that the BAM crude oil model was “as extended and overbought as it was at the 147 all-time high.”  We also said that “we expected what most investors seemed unprepared for, i.e. a crash in crude oil as well as the crude sector stocks during the summer.”  (Our shorts are focused in the XOI and we’re long the DUG) 

That said, if crude slips under the 62 level and begins accelerating to the downside, we should see crude trade into an “air-pocket” creating an immediate plunge to the 53.50 level this week. 

Crude will remain bearish in our work into Q1 2010 and we’ll stick with our 23-25 dollar target.

Full report coming soon