My conclusions are that a buy should be take and stops quickly brought to break even once in good profit. Why?
Case 1 - Don't enter long and we are in scenario 1... miss a great entry for the market continuing.
Case 2 - Enter long position but we are actually in scenario 2... if we bring stops to break even as soon as we are slightly in profit but scenario 2 plays out... no loss. But we don't miss risking the market in case we're wrong.
The biggest thing to take away from these 2 ideas is that I am on oil ... the only question is "Is the market ready to resume?"... Personally I think not quite... but I don't want to miss risking it.
Hence here are my 2 possible outcomes illustrated.
I'm entering an aggressive short at 39.50 with stops above 39.85 (current high of today's rally) with a view that we will see a decline now below 36.60.
If this happens I will be 90% confident that we are seeing scenario 2 playing out.