Crude oil volatility has picked up, with three moves of more than 7% over the past four days. That is the type of activity that we’ve been looking for following a crash, but in 1986 and 2008, these extreme moves persisted before a low-risk rally took hold. About the most dangerous activity across markets right now is trying to pick a bottom in crude oil. That has been the case for a couple of months, and continues to be so.
… YES, it is exactly the kind of activity we see when crude has formed post-crash bottoms, but NO we have not seen enough of it.
… A 7% daily move (up or down) in crude is a 3 standard deviation event. The chart above shows how many of these 7% moves crude made over a 30-day period.
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