If you feel lucky, buy oil today…

Click here to view the PDF version

Quotable

“Nobody gets justice. People only get good luck or bad luck.”

                                   Orson Welles

Commentary & Analysis

If you feel lucky, buy oil today…

Harry Callahan: Uh uh. I know what you're thinking. "Did he fire six shots or only five?" Well to tell you the truth in all this excitement I kinda lost track myself. But being this is a .44 Magnum, the most powerful handgun in the world and would blow your head clean off, you've gotta ask yourself one question: "Do I feel lucky?" Well, do ya, punk?

That little monologue above is from Clint Eastwood, aka Harry Callahan, in the classic movie, Dirty Harry.  As I viewed my wave chart on oil this morning, I thought: Do I feel lucky?  You may believe investing/trading is not about luck.  I would disagree. Give me luck over being good any day.  Here is what we have in the chart and what I wrote in our 2016 Outlook & Global Macro View report:

One of the reasons I have focused on commodity currencies in this macro section is my expectation/guess, based on a symmetrical Elliott Wave setup for the oil market.  As you can see in the chart below oil prices (WTI futures) are heading into to a test of the credit crunch bottom, which came in at $32.40.  The extension target for what appears to be a quite symmetrical 5th wave is 31.54—how nice to pierce the old support, take out a whole bunch of sell stops, and rally sharply into the new year to throw a monkey wrench into all the dire forecasts for oil and commodities in general.  It’s almost too perfect a scenario to verbalize.

I show a 32.10 low in oil today, on Reuters.  We also know markets seek out levels to find the most activity, usually before turning.  And as I said, I would imagine there is a lot activity here at the major swing low--$32.40 (labeled Wave A). 

I am not sure if I feel lucky enough to plunge in.  My trading of late has been far from lucky, unfortunately.  But it’s worth a look and some consideration with panic starting to fill the air.

Jack Crooks

President, Black Swan Capital

www.blackswantrading.com

info@blackswantrading.com

Twitter: @bswancap


Comment