I’ve drawn a hypothetical rally to the 78.39 target as a straight line. Although the sharp move through p=71.50 makes the target very likely to be achieved, we should be prepared for countertrend swings that we can buy ‘mechanically’ to get a profitable piece of the trend. (Of course, fading minor trends within bigger ones will always be possible.) The uptrend is strong enough that we could expect to profit with a ‘red-line mechanical’ bid at p, stop 69.20. A stop-loss that wide won’t be necessary, however, since we have better tools at our disposal to cut textbook risk by as much as 95%. Let me note in passing that, for years, we’ve seen crude turn higher without fail each time pump prices fell to $3. Could there be better evidence that the biggest commodity market in the world is as crooked and sleazy as a three-card monte game on a midtown Manhattan sidewalk?
CLX24 – Nov Crude (Last:74.38)
