Oil Hits Most Overbought Level Since 1999

Following its monster surge earlier in the week, the price of oil closed more than three standard deviations above its 50-day moving average on Wednesday.  This is a feat that hasn't been accomplished in more than ten years, and going back to 1983, it has only occurred in eight other periods.  In the table below, we highlight the first day in each period where this occurred as well as the commodity's performance over the next week and month.  In more than half of the prior periods, crude continued to rise, averaging gains of 1.07% over the next week and 4.03% over the next month.  These gains are somewhat skewed by the spike in August 1990, but even if we use median returns the results are still positive, albeit less so.

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