E-Mini Crude Oil Futures Volatility Forecast (27/02/2011)

The last Monday the market opened at $ 95 with a $ 6 gap up from Friday’s closing price (18/02/2011) at $ 89.92.1: an unbelievable, and practically impossible to forecast, jump.

The actual volatility is 2.09% (33.3% in annual terms) but the plot displays a clearly downward sloping curve signalling that the variance is about to get back to its equilibrium point which is set to be around 1.5% (23.8% annualised).

As a consequence, the decreasing rate of market fluctuations should favour a further boost of E-Mini Crude Oil futures prices which could now achieve the $ 99 and perhaps “attack” the $ 100 a barrel by the end of the next week.

The staff of HyperVolatility is bullish on this market and we will place some longs as soon as the market opens since the continuing downtrend of the US dollar should help to push oil prices even higher.

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