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Is it inversion time for the january 2016 heating oil future?

Looking at patterns (according to the volume spread analysis), we can see a selling climax, followed by a stopping volume and, a few days later, by a no supply bar. A typical bullish sequence...

heating oil futures patterns

If we look at the COT Index, the commercials bullish stance could confirm our guess.

heating oil futures commitment of traders

Also looking at the seasonality we see a bullish trend (now and for the beginning of 2016) that would suggest a reversal.

heating oil futures seasonality

Heating oil futures also show a very high volatility: the implied volatility is at 94.18%, the historical at 33.87%. It seems heating oil is reaching a bottom level, and could be ready to take off.
Remember: this is not a trade solicitation and, if you decide to trade, you do it at your own responsibility.
Our Market Matrix points to the Heating Oil future as one of the most promising candidates to a leading role in the current commodities rebound. A very bullish Cot, a nicely drawn double bottom, a seasonal trend rising up to the end of September, a ratio with the dollar eager to reverse to the mean, a VSA analysis decidedly bullish and, last but not least, a recent upward breakout of a small but very clean (perfectly horizontal) congestion area. In theory, all is fine. In practice it is probably better to wait a little pullback to the compression breakout level before entering long without false modesty.


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