• 5 minutes Is Pete Buttigieg emerging as the most likely challenger to Trump?
  • 7 minutes Can LNG Kill Oil?
  • 8 minutes Question: Why are oil futures so low through 2020?
  • 11 minutes US Shale: Technology
  • 18 hours “The era of cheap & abundant energy is long gone. Money supply & debt have grown faster than real economy. Debt saturation is now a real risk, requiring a global scale reset.”"We are now in new era of expensive unconventional energy
  • 5 hours CoV-19: China, WHO, myth vs fact
  • 1 hour Blowout videos
  • 6 hours Don't sneeze. Coronavirus is a threat to oil markets and global economies
  • 13 hours Has Trump put the USA at the service of Israel?
  • 1 day Democrats Plan "B" Bloomberg Implodes. Plan "C" = John Kerry ?
  • 13 hours Oil Stocks
  • 3 hours Natural gas is crushing wind and solar power
  • 5 mins Foxconn cancelled the reopening of their mfg plants scheduled for tomorrow. Rescheduled to March 3rd. . . . if they're lucky.
  • 2 days Question - What if there are no buyers for Chevron's Appalachia Assets?
  • 2 days Natural Gas
  • 2 days Cheap natural gas is making it very hard to go green
Alt Text

Indonesia’s Oil Output Expected To Fall In 2020

Indonesia’s production of both oil…

Alt Text

Oil Rallies On Small Crude Inventory Build

Oil prices rose on Thursday…

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