CLZ15 – December Crude (Last:39.39)

You don’t need to be a technical analyst to discern in the weekly chart the weight of the selling (see inset). I’ve been using a $29 target but am modifying it because of the clarity of this particular chart.  It suggests that crude is very likely to fall to at least 32.79, a ‘secondary’ Hidden Pivot, but that quotes as low as $22 a barrel are possible, technically speaking. The higher target became an odds-on bet when the midpoint pivot at 43.66 was decisively breached in August. With the selloff of the last two weeks, the December contract appears to have resumed its bear-market plunge in earnest. The futures are short-able now, but I’ll wait for a ‘mechanical’ opportunity before I give the signal. Shorting crude requires a cautious approach and tight stops, since it is such an obvious strategy. Mr. Market has a canny way of making certain that doing the right thing does not produce easy profits for most traders.  That’s why the short-squeeze rallies in this vehicle have been especially vicious and are likely to continue to be so.________ UPDATE (November 20, 1:37 a.m. ET): The futures are struggling to crack $40, presumably because every Tom, Dick and Harry in the trading world is already short.  We’ll know more about the intermediate-term once we’ve seen sellers interact with the 39.47 target shown (a new chart). _______ UPDATE (11:30 p.m. on 11/22): Friday’s plunge not only crushed the 39.47 Hidden Pivot, it also exceeded the key low at 39.22 recorded in late August. If the futures were to close beneath it for two consecutive days, that would signal that the expected move down to 32.79 is starting in earnest. Crude at that price would imply that the central banks have lost the battle against deflation.