They call it Earl

My colleague Dave Steckler likes to flaunt his New York heritage even though he's been living and working in the central part of the country for more than the decade I've known him. When he jokes about earl he means oil.

I admit to blowing the call on oil a few times on the way down. Fortunately, there was very little in the way of trading in that regard so my investment dollar tank remains full. But here are some of the things that have happened or where offered in the past week.

• 12/4 - ExxonMobil was setting up for a breakout despite oil's continued weakness. This suggests something positive for black gold
• 12/4 - Chatter and the Gulf Oil CEO were looking for oil to fall to $20. Remember what happened when they started to talk 200 and oil was only at 147? Yep, the trend changed.
• 12/5 - In the newsletter, I offered a seasonal chart of crude oil which showed a late December bottom. The rally, again, the seasonal average, lasts until September. Chart credit to Johannes Kirchmeir, an analyst in Germany
  
• 12/10 - Also offered a ratio chart of oil stocks to the commodity that was heading straight up. Although the data are few, the last time that happened oil rallied.
• 12/11 - keeping our position in Arena Resources (ARD) even though it has already hit the top of its trading range. Oil and stocks are firm so let's let it ride (up 22.4% since we bought it Monday morning)
  

What's the point? Everyone was whining that demand for oil was so low that it will never recover to its old highs. Perhaps. That was indeed speculation driven, but oil prices - and forget what OPEC does - are hinting that there is life left in the old economy yet.

And from a purely technical point of view, the pendulum of fear and greed was way over towards greed last summer. It swung way over to extreme fear this month and it is time for a little mean reversion.