Chart constructed using Advanced GET End-of-Day

Back in our November 19th missive "The Rhythm of Oil," we forecast that crude oil would launch a final spike higher into this past week, followed by the beginning of a bear retracement of multiple months. While natural gas did indeed spike higher in a manner consistent with our vision, crude oil and other petroleum futures collapsed instead. Our analysis was clearly wrong, and for that we apologize.

That said, we thought it worth taking another look at crude -- at least with a short-term perspective. The above chart depicts January crude on a 60-minute basis. It looks to us relatively tight and complete to the downside on a Fibonacci basis. A solid bounce, if nothing more than that, should now transpire. Even if the intermediate term trend may have turned down, we think it is a high-probability proposition that a bounce to $30.91 is in the cards in the coming days. Above that, $32.79 is the next level of resistence -- marking both a 61.8% retracement and the 100-hour moving average.

And what of equities, you say? Friday's intraday 38-point advance in the S&P 500 was truly impressive, and the subsequent 40-point plunge in the last fifteen minutes of futures trading truly scary. Net, net, we thought the week of Dec 4th. would bring a Nasdaq low toward 2450 and reversal, and it did. We now consider ourselves flat and univolved -- and happy to be that way. There are no low risk bets in equity futures at the moment. If our life depended upon it, a choppy bias to the upside continues as our more favored short-term proclivity. Longer term, rallies toward 3,200 on the Nasdaq are likely to peter out and fail.

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Sand Spring Advisors provides information and analysis from sources and using methods it believes reliable, but cannot accept responsibility for any trading losses that may be incurred as a result of our analysis. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, and should always trade at a position size level well within their financial condition. Principals of Sand Spring Advisors may carry positions in securities or futures discussed, but as a matter of policy will always so disclose this if it is the case, and will specifically not trade in any described security or futures for a period 5 business days prior to or subsequent to a commentary being released on a given security or futures.