The Endgame for Oil Wars

While equities are still largely bouncing this afternoon, even if quite a few parts of the market are off their highs, crude oil remains in search of a bottom. On the monthly chart for crude futures, below, note the significance of the $60 level, going back many years. Of course, we have to then go to the next level of thinking, considering how many eyes are on crude right now, which normally are not. In other words, it may be too obvious for crude to bottom at this $60 level, and perhaps we see an undershoot into the mis-$50's first. Coming into the week, I thought there was a chance crude could have offered up a nice tradable bounce. However, it appears perhaps too many others were looking for just that. And, thus, the need to go to that "third level" of thinking, as is known in poker, looking for the not-so-obvious play. Also note that energy stocks are giving back quite a bit of their gain this afternoon, judging by the XLE action. I view this action, overall, in the energy space as begin messy and not high probability trading at the moment, either way.