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Oil recently had a nice three day rally of about 20%. Suddenly the “gloom and doom” about this complex vanished and analysts were quick to conclude that a bottom in oil had been made. I say, “not so fast.”
Oil (light crude index) had a 59% decline ($63) going into the low of January 28. A $9 rally is just a bounce from the low, probably maneuvered by the high frequency trading operations to squeeze the overwhelming number of shorts. It worked.