Goldman Sachs’ ETF for crude oil has been struggling to hold above the 4.65 midpoint Hidden Pivot shown. This level is roughly equivalent to futures contracts at $30 per barrel, and although I expect it to give way eventually, sending futures quotes into the low $20s, we can use this vehicle to get a piece of any short-squeeze rallies that occur in the interim. Since near-the-money options trade with implied volatilities in the stratosphere, we are more likely to buy shares than puts or calls unless a purchase of the latter can be perfectly timed to our advantage. At the moment, OIL is trading on a five-day-old sell signal (a mechanical short, actually, from 4.93), but the next place where it would become a potential buy would be at 4.36, the ‘secondary’ pivot of the bearish pattern shown. For now, I’ll recommend setting a chart alert to bottom-fish with a 4.38 bid, stop 4.29. ______ UPDATE (February 11, 10:22 a.m. EST): DaSleazeballs gapped this hoax down to 4.35 this morning, filling our bid. The rally so far to 4.44 did not get it out of the woods, but you should stick with the 4.29 stop in any event. _______UPDATE (February 12, 2:11 p.m.): The trade worked perfectly when OIL bottomed Thursday at 4.30 and rallied to a so-far high of 4.55. Several subscribers reported getting in near the low, but I’ll make this catch-as-catch. My suggestion would be to keep 25% of the original position for a swing at the fences. Please let me know in the chat room where you stand, since I may be able to provide further guidance.
