Analog Update: Dec 9, 2016

The great thing about analogs is that they tell you when a move will occur and which direction it will be in.  But, there are two not so great things about analogs: the moves aren’t always the same size as in the prior period; and, they don’t always make sense.

The most frustrating part about forecasting is seeing moves play out that are completely divorced from the economic fundamentals.  Such is the case, now, as the talking heads are coming up with all kinds of reasons for the ongoing rally except the ones that matter: oil and USDJPY are being ramped higher, and VIX forced lower when necessary, which has kept the algos in an unrelenting meltup.

Note that CL, for instance, has “broken out” of a series of falling channels as fast as it can construct them.  Having reached last night’s target right on time, it’s breaking out again.2016-12-09-cl-15-0615We’ll take a look at our current analog, and adjust a few price targets as needed.

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