Oil Update

Oil has already reached the $51 target I set out to achieve when putting on the trade back in December but I am still in the oil position.  I am seeing some things which lead me to believe that oil still has one more leg lower to go before reaching its yearly cycle low.

​Oil has traded to the 200 day moving average on the near by chart, and seems to have found support there which you should expect.  Because oil is in the timing band for a yearly cycle low, we should expect oil to break its yearly cycle trend line.  When that happens, the next area of support would be at the last intermediate cycle low which was around 43.

​Oil looks like it could be forming a monster bear flag on the December chart.  Should this confirm, the measuring distance would have oil moving to 46.  That would be enough to push the oil optix below 25 and set the stage for a monster rally.  This would be a $10 move from where we entered the position.  That is worth $10,000.  When converted to synthetic bushels, that would be worth .56 per bushel.

The largest moves you have with any asset is that initial thrust out of a yearly cycle low.  Because of the extreme bearish sentiment present at yearly cycle bottoms,  the first move out is huge.  We will want to buy this position when the time comes, probably some time late next month. 

---