Crude Oil (NYM.CL) futures have seen two 'big' declines in two of the last three days with a 52-week high sandwiched between. Crude oil may be stalling out at the top as it has really gone nowhere since the gap up last Friday. It has been a rare occurrence for this market to move any direction but vertical. Will this sideways move turn into a sell-off that gets us back below $120?
Q: How has NYM.CL responded to losing 'big' today and two values ago with a 20-day high rally in between?
A: According to the seven previous occurrences of this event omitting any repeat occurrences within 10 trading days, EventEdge indicates that NYM.CL has shown a strong bearish edge that peaks two trading days after the event. Thus, the projected date for the peak of the bearish edge relative to the current event date (Wednesday, May 14, 2008) is Friday, May 16, 2008.
NYM.CL declines in 100% of the cases (7 of 7) by an average of 3.6% relative to the close on the event date. The overall return of the seven cases is -3.6%, which, based on the close of NYM.CL on the event date ($124.22), provides a target price of $119.75.
To see this in EventEdge® click here.
Note: The edge on this event is not up to par with what the site would deem "tradable" due to the small number of occurrences, but any bearish edge in such a strong bull market like NYM.CL is worth noting.
Mickey Schoenhals is an analyst with Markethistory.com.
