I’m not the sharpest knife in the drawer, and sometimes it takes me years for a truth to sink through my thick skull. Allow me to give you a couple of examples.
The first has to do with buying gold bullion. Now, I’m not a gold kook, but I’m fond of coins and bullion to some degree, and there have been instances when I got the urge to buy the stuff. Usually this would come after a long bout of strength on gold’s part, and I just couldn’t help myself anymore, so I rushed out and gobbled up whatever I wanted at my local dealer.
Well, oil’s explosive rally recently has been a thorn in my side (although the NASDAQ’s weakness has helped balance it out). I wanted to take a look at recently counter-trend rallies in oil and see if there might be any insights to be drawn. I have one……….
It seems to me, looking at recent history, that these idiotic, wrong-headed rallies last for thirteen days before reversing. Now I realize a sample set of two isn’t exactly mind-blowing, but what else ya gonna do? Just take a wild guess? Thus, if this pattern holds, oil has the rest of this week to keep pushing higher before it finally rolls over yet again.
One thing to note about the chart above……it does NOT include today’s action (which is another big up bar). I love SlopeCharts, but one limitation is that futures data is end-of-day only at this point, so I wanted to be really clear that one “day” is not present in what you see above.