The futures pulled back sharply after DaBoyz had wrung shorts’ necks early in the session, but there’s no disguising the impulsive power of the thrust. It exceeded several major ‘external’ peaks on the daily chart (see inset), all but guaranteeing that the weakness that has ensued will prove to be a corrective buying opportunity. The selling likely has farther to go before it has run its course, however, and that’s why bulls should exercise particular caution before trying to re-establish long positions. That implies looking for the turn on the 15-minute chart or lower. Don’t hesitate to nudge me in the chat room for corroboration of any trading ideas you may have in real time. In the meantime, we have several bullish targets to guide us, but I’ll suggest focusing on one at 55.93 ahead of the next buying opportunity (daily chart, A=40.13 on 4/5/16). It is more than merely plausible, given that the point B high of the impulse leg with which it is associated exceeded 2015’s key ‘external’ peak at 53.65. _______ UPDATE (Dec 14, 8:09 p.m. ET): The chart (a new one) shows a possible set-up for a counterintuitive entry from the long side if oil prices fall a little farther. This trade is recommended only for those of you who are comfortable with the tactic. If the implied entry risk of $1200 per contract is too scary, I’d recommend using a ‘camouflage’ entry trigger on the five-minute chart or less to initiate the trade. This would occur only after it has been signaled on the pattern shown._______ UPDATE (Dec 15, 7:49 p.m.): The ‘counterintuitive’ trade triggered Thursday at 51.14 following a point ‘C’ low at 49.95. Accordingly, I’ll track four contracts from that price, stop 49.90. If you substituted a ‘camouflage’ entry, it would have come at 51.10, stop 50.76, off this pattern on the 30-minute chart: a=50.18 (noon); b=51.48 (1:30 p.m.); and c=50.77 (2:30 p.m.). The initial risk per contract using the ‘camo’ trigger would be $340 theoretical, or about 70% less than the counterintuitive entry. If the opportunity arises, half of the counterintuitive position should be cashed out at 52.32; or at 51.42 for the ‘camo’ position. Both orders are to be held o-c-o with the respective stop-loss I’ve noted for each. _______ UPDATE (Dec 18): If you took the ‘camo’ trade, you should have exited two contracts (or half of the initial position) at 51.42 for a gain of about $640. At Friday’s closing price of 52.03 the total theoretical profit would be about $2480. Exit a third contract if the futures hit 52.57 and keep the last one for a swing at the fences. Use an o-c-o stop-loss at 51.50 for the two contracts still held. Regarding the ‘counterintuitive’ trade, it’s showing an unrealized theoretical gain of $3560 at Friday’s closing price of 52.03. Use a 51.50 stop-loss for now for the four contracts held, but make the order o-c-o with an offer to sell two contracts to close at 52.32._______ UPDATE (Dec 18, 9:17 p.m.): A moderate rally this evening has hit 52.52, allowing subscribers who got long at 51.14 to exit half the position for a $2760 gain. Offer a third contract at 55.90, three cents below the D target of this pattern on the weekly chart: A=40.13 (4/8); B=53.72 (6/10); and C=42.34 (8/5). Against that order, use a stop-loss at 50.49 for the two contracts (or multiple thereof) still held._______ UPDATE (Dec 20, 1:05 p.m.): Concerning either of the two positions, you can roll now from January into February, selling the former and buying the latter. I’ll raise the basis by $1.00, which should make the cumulative profit about right.
