WTI crude down $1.61 to $36.28

A rip in oil yesterday has turned into a rout today. The big driver has been the terrible Chinese trade numbers.

Technically, the rally stopped right when it was supposed to. I've been highlighting this chart for weeks and the high earlier today was $38.39 which was precisely the Jan 4 high and just ahead of the 50% retracement.

Despite the big decline, there is a case for caution here from shorts. The decline doesn't engulf yesterday's candle.

Overall, markets are in a broad retracement phase today and that includes stocks, which are poised to finish lower for the first time in 6 sessions. The S&P 500 is testing the session low of 1979.50. The index is down 18 points to 1983 with 30 minutes of trading to go.