• 4 mintues Texas forced to have rolling brown outs. Not from downed power line , but because the wind energy turbines are frozen.
  • 7 minutes Forecasts for oil stocks.
  • 9 minutes Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 13 minutes European gas market to 2040 according to Platts Analitics
  • 16 hours Simple question: What is the expected impact in electricity Demand when EV deployment exceeds 10%
  • 14 hours America's pandemic dead deserve accountability after Birx disclosure
  • 2 days Biden about to face first real test. Russia building up military on Ukraine border.
  • 3 days Trump punches back at Fauci and Birx's revisionist history (aka lies)
  • 4 days The coming Cyber Attack
  • 1 day U.S. and Chinese investors to buy Saudi pipelines , $10 Billion deal.
  • 2 days Create a new law "Postericide" to prosecute and imprison Climate Change "Deniers"
  • 3 days New Chinese Coal Plants Equal All those in U.S.A
  • 3 days Goldman Betting on Cryptocurrencies
  • 6 days Beware the Left's 'Degrowth' Movement (i.e. why Covid-19 is Good)
  • 17 mins Does .001 of Atmosphere Control Earth's Climate?!
  • 5 days New German Study Shocks Electric Cars: “Considerably” Worse For Climate Than Diesel Cars, Up To 25% More CO2
  • 20 hours NG spot prices hit triple digits for weekend delivery
Ecuador's Oil Industry Desperately Needs A Miracle

Ecuador's Oil Industry Desperately Needs A Miracle

Ecuador’s oil industry is facing…

Smart Money Is Betting On A Helium Boom

Smart Money Is Betting On A Helium Boom

The world is racing towards…

Editorial Dept

Editorial Dept

More Info

Premium Content

Predicting The Bounce In Crude Oil

To riff on an old joke about comedy, the secret to success in trading is ………….. timing. It is sometimes hard for people to grasp, but what you buy or sell is in many ways less important than when you buy or sell it. Being right in the long term does you no good if you are forced out of the position because you are very wrong in the short term.

That is worth remembering when it comes to crude oil right now.

To anyone like me with a penchant for the contrarian like me, this chart is catnip.

I mean, look at that big collapse…the bounce from that is going to be spectacular!

That view is not just based on contrarianism, however. It is also based on history. Look at the 1-Year chart above for the main WTI futures contract, CL. Over that time, we have seen two similarly sharp drops in crude, in May and September.

Both, like this one, were immediately preceded by a big up day, and both were followed by big retracements. As if that doesn’t make buying into this drop tempting enough, they are four months apart, and this collapse has come four months after the last one. That doesn’t mean anything at all, of course, but the human brain seeks order, so the rhythm to the spikes and collapses will give the trade subconscious appeal.

The problem is that buying here would be a perfect example of attempting to catch a falling knife, something that traders frequently tell each other is dangerous. Contrarian…





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News