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    Crude Oil from dinosaurs into an industrial dinosaur

    February 27, 2020

February 27, 2020

Crude Oil from dinosaurs into an industrial dinosaur

As Oil Nears $50 Again, is Now the Time to Buy?“What I find peculiar, what contrary thinker finds peculiar, is how analyst aka content providers – when in doubt themselves lead with a subject line that goes like this, “As Oil Nears $50 Again, Is Now the Time to Buy?”

Obviously yes according to this punter, on February 25, 2020, 10:58 am his conclusion is  “The elevator ride in the crude oil futures market ended at just below $50 on nearby NYMEX futures. The energy commodity is back on the stairs to the upside. I would be a buyer on dips in the crude oil market.”
Contrary Thinker for many price-based reasons, rather than the if and buts of OPEC, not Trade War with China, and not a seasonal pattern. There is no outside world. It’s the market that has not set up a platform of a low-risk bottom.  Our Target is $20.

The context the market is trading in could not be more forceful. The Long-Term (L-T) chart is providing a three-month lead warning that a forceful trend was eminent, with the TE#2. Combine that with both I-T and S-T volatility model reaching a panic extreme, again. Like the panic decline in the fourth quarter of 2018, prices are following through instead of taking a breather, with the latter condition of a pause at least for a few days the more likely.
However, prices have now broken down into I-T support zone that runs from 45.30 to 50.60. So, if the bulls are going to make a stand and hold the decline off, this is the price level to do it.
The problem is there are no signs for a bottom, here. While “ANYTHING” is possible, CT’s overbought/oversold set of oscillators are oversold and in gear, not suggesting a low.

Worse yet is CT’s %BB-VIX of the implied volatility for crude entered panic territory the week of Monday the 16th shown in the right-hand window. The chart on the left provides a traditional bar chart EWT perspective, which also suggest the market is going into the steak and potatoes part of the trend.
The short only scalper is engaged since 2.20.20 and remains that way.

Great and Many Thanks,

Jack F. Cahn, CMT

A Thinking Man’s Trader Since 1989,

Copyright 1989-2020

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