Crude Oil About To End Record-Breaking Streak

With early gains to start the day, crude oil may finally end a record-breaking streak. It has been below its 200-day average for 427 trading days, by far the longest such stretch in its history.

Many traders use the 200-day average to define bull and bear markets, so the chance that crude could be ending its bear market is a potential game-changer for some. For the first time in years, this could cause longer-term trend followers to finally look at crude from the long side.

Let's go back and look at every time crude went at least 100 days below its 200-day average then finally broke the curse. Returns in the table below are from the day when crude finally closed above its 200-day.

Unlike many markets that show some follow-through after ending long streaks, crude did not show that tendency. Returns across most time frames up to six months later were weak, with barely more winners than losers. The exception was one year later, when overall returns were good but highly variable including two massive losses.

Late last year, we discussed a handful of reasons why the bear market in crude was likely ending, so we happen to think that the end this streak will lead to positive returns, but based on history we can't readily rely on the ending of the streak itself to be a positive factor going forward.