The composite weekly chart shows that crude has bounced from precisely where we might have expected, the ‘D’ Hidden Pivot target of a pattern that took nearly half a year to play out. As such, we should expect an upward reaction requiring perhaps three to four weeks to run its course. A breach of the recent low in less time would be warning of another leg down. Trouble is, on the monthly chart the next major target below is 13.97, an outcome that seems most unlikely. Splitting the difference yields a target of around 22.00 that I’ve broached here before. My hunch, though, is that late January’s bottom at 27.56 will stand for at least another couple of weeks. In the meantime, we should brace for a possible short squeze from hell, just to remind traders that being confidently right about the trend is no guarantee of easy profits.
