I avoid letting crude futures sit for long on the list of touts simply because it’s not fun. Although nailing NYMEX swing highs and lows is a piece of cake for Pivoteers, the moves are driven relentlessly by planted news stories about supply/demand that on any given day can conflict diametrically.  This game gets tiresome fast. Although I enjoy commenting on the forces that drive the vehicles we trade up and down, in the case of crude, what energizes it is a muddle of whatever claptrap the vested interests are putting out to the hacks in the news media. I exempt the Houston Chronicle from this indictment because its coverage of the energy sector is superb. But I challenge any trader to make money on futures swings merely by poring over the Chronicle’s excellent coverage each day.

Timely ‘Saloon’ Post

If you are skeptical that technical analysis can predict crude’s swings with ease and precision, check out Tuesday’s discussion thread in the chat room beginning with an 8:20 post in the Saloon (use ‘CLG19’ as a search word if the material has been archived).  It was followed by a 14:37 post in which I aired a $46.01 bid for the February contract with a very tight stop at 45.87. Crude made its actual low — a potentially important one, by the way — at 46.11; but when it subsequently rallied 86 cents, I pulled the bid rather than risk becoming the hapless owner of sloppy seconds.

I have no problem with Saloon and Banter Room regulars who want to discuss trade set-ups in crude futures, and I’ll even go along with your ideas and be grateful for them if they seem promising. I posted the trade on Tuesday simply because it looked like lay-up; I will continue to do so when warranted. But I’ll need to see very strong interest in the Ricks Picks trading lounges before I consider stepping up coverage.______ UPDATE (Dec 20, 9:35 p.m. ET): A slight dip below the 46.01 ‘hidden’ support has not altered my outlook. _______ UPDATE (Dec 23, 5:07 p.m.): Sellers have demolished Hidden Pivot supports both major and minor recently. If the February contract slips any further, taking out the 45.34 ‘midpoint support’ shown in this chart, look for the weakness to continue to at least D=42.32. ______ UPDATE (Dec 24): The futures fell to within four cents of the 42.32 target flagged above. However, unless you were short on the way down, the almost-perfect hit did not provide the opportunity we might have expected, since it occurred in the final minutes of a holiday-shortened session. We are getting used to seeing targets precisely achieved at the ‘wrong’ time of the day, but sooner or later we’re bound to see a reversal at mid-session, when we can take position risk without worrying about carrying contracts or stock overnight. _______ UPDATE (Dec 26, 6:30): Today’s very powerful rally in crude, juxtaposed against a record-breaking surge in stocks, tells us very clearly that deflation, not inflation, is the central banks’ real worry as it has been for the last 20 years. Oil is the collateral for hundreds of trillions of dollars worth of loans in derivatives markets, so you can hardly blame Wall Street for breathing a sigh of relief when crude’s price rises. Watch how the Dow and crude move in-sync in the coming months and you will see this confirmed.