Yesterday’s exceptional short-squeeze probably scared the hell out of the bears, even if it caused us little consternation.  A 49.14 target that I’d aired in the chat room around noon anticipated the intraday high of the nearly $6 rally within 19 cents. The futures were still buy-able at the time, trading nearly $2 beneath the target, but because only one subscribers reported taking advantage, buying a single contract when the futures pulled back to the 47.29 midpoint pivot, I have not established a tracking position.

Looking ahead, we can use the pattern shown to leverage the next upthrust, assuming there is one. The point ‘C’ low is as yet unformed, but in the event that 47.23 survives as a point C low, a follow-through to as high as 52.96 is possible. My hunch is that crude lacks the power for a second-wind rally of that magnitude, and that a stall at the midpoint pivot of the pattern — speculatively 50.10 as of this moment — would be likely (and potentially short-able). ________ UPDATE (September 1, 9:36 p.m.): My prediction of ‘no follow-through’ was putting it mildly. Crude crashed back down to earth, giving up nearly all the gains achieved by the previous day’s fraudulent rally. To repeat: The short-squeeze rallies in this vehicle will be particularly nasty because ‘everyone’ knows crude is going much lower; and because, this time at least, ‘everyone’ is going to be right. It is of course Mr. Market’s job to make certain that ‘everyone’ does not profit effortlessly or painlessly as events expected by all continue to unfold as anticipated. _______ UPDATE (September 3, 1:12 a.m.): For reasons noted above, don’t be distracted by the nasty rallies; they are just short-covering. Under the circumstances, every promising D rally target should be regarded as a shorting opportunity, tightly stopped. ________ UPDATE (September 7, 11:17 p.m.): A trade recommendation that I posted in the chat room around 5 p.m. could have produced a quick gain so far of as much as $610 per contract. I had suggested bidding 44.18, which turned out to be within 4 cents of the low of a 65-cent bounce.  If you still hold a position based on my suggestion, please let me know in the chat room and I’ll establish a tracking position.  In the meantime, partial-profit taking is advised with the futures currently trading 0.05 off a 44.79 high._______ UPDATE (September 8, 7:57 a.m.): The bounce has now gone as high as 45.81, implying a gain of as much as $1630 per contract for those who bought at 44.18 as advised. Since there have been no reports in the chat room on this, I won’t be tracking the position any further.