By Jeff Clark in Growth Stock Wire:

There are a couple of problems with the bullish scenario [in oil]...

First of all, there's the negative divergence on the Moving Average Convergence Divergence (MACD) indicator. This momentum-based indicator often provides the first warning sign that a chart's primary trend is about to change.

Second, there's a strong probability that the U.S. dollar is attempting to pound out a bottom. I wrote about the potential for bottom in the dollar back on September 3. All of the conditions that existed then still exist, and the greenback has traded higher over the past couple of days.

If the dollar rallies from here, then oil – which has benefited from a falling dollar – will likely break down below its rising support line. A drop below $66 per barrel projects a move…

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