The 1,350 to $1,400 area is going to be important here. We banged against $1,400 a couple of times over the past two days and were not able to surpass it until this early this morning, when we had a quick break and then a jet to over $1,420. There was a lot of selling into that break, and so a retest of $1,400 will be increasingly important to see if this will be a failed bear flag or an actual recovery from the recent oversold condition.
We are as of this writing, trading at $1,407.
There is a possibility that we could snap back extremely hard on this recent down-plunge. There are stories all over the internet about large physical purchasing going on. This could be anecdotal (well, it IS anecdotal), or it could reflect the difference between the paper and physical markets. If the last couple of days action was a desperate move to combat an imminent physical delivery problem (as some have speculated), we could see a torching of the shorts like none have encountered since early 2009. Stay vigilant and nimble here.