Crude has been very squirrelly in recent weeks, to put it mildly. Although I regard the uptrend from late August’s lows around $40 as a bear rally, even in that context, this week’s selloff looks merely corrective. If so, the weakness should reverse from 46.25, the p2 pivot of the pattern shown. Traders could buy there with a 46.27 bid, stop 46.19, but camouflage could also be used to forge a less nerve-wracking entry. The most bullish target I can project for this up-cycle is 55.98, a Hidden Pivot that can be found on the daily chart using these coordinates: a= 39.22 on 8/24; b= 50.89 on 8/31; and 44.31 on c=43.31 on 9/24. A ‘buy’ signal has already been tripped at 47.23, but the trade that resulted would have stopped out bulls for a profit after hitting p=50.15 on 10/7. _______ UPDATE (October 15, 2:46 a.m. ET): Price action no longer looks favorable for bottom-fishing at 46.25. Instead, I’d suggest using camouflage or a mechanical offer to get short ahead of a prospective fall to 45.40 (10-min, A=0.61 on 10/12; B=47.11 on 10/13). If you’re short when the futures get there, and only if you’ve been short, reverse the position and go long with a 12-cent stop-loss. _______ UPDATE (1:03 p.m.): This morning’s bounce calls for a target adjustment, since the p and p2 of the following pattern on the 30-minute chart seem to be working very precisely: A=51.42 on 10/9; B=47.11 on 10/13. This implies p2=45.67 (i.e., where the current bounce began); and D=44.59. It also implies a ‘mechanical’ short from p=46.75, stop 47.47. The $720 theoretical entry risk is much higher than we typically allow, so ‘camouflage’ is the recommended way to go. ______ UPDATE (10:29 p.m.): Looking for ‘camouflage’ might have saved you some stress, since it would have tripped you long at 46.62 rather than short a 46.75.
