#7 - Wide Trading Ranges to Persist
I was surprised by the extent of the move in Oil in 2014. Admittedly, once the slide got underway I was not surprised to see it continue: I always expect large moves to overshoot.
I wanted to express a view on oil for 2015 but I found myself conflicted. On the one hand, I see no real reason why the pain couldn't continue and Oil could continue down to $25 (say). After all, it has been at $10 in the not too distant past.
On the other hand, it has had a proper correction and I could see a strong rally.
I just don't have a fundamental view at all. I have historically been of the view that oil is ultimately a 1-way bet upwards as supply eventually does go into terminal decline. I am now doubting myself on this one : I am starting to believe that alternatives could emerge in a timeframe that allows oil not to ever run out.
So, the only thing I am willing to forecast is that really large trading ranges will persist.
Call - Volatile trading for oil
Prediction - High-Low range for Crude to exceed 50% (~$25)
Trade - difficult without use of options
Conviction - Medium
Feasibility - Low
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