Raise your hand if you’re tiring of the relentless decline in oil. If your hands not raised it means one of three things.

-You’re short oil and oil stocks (you friggin stud!).

-You own two Humvees and are loving, I mean loving, low gas prices.

-You’ve yet to have the misfortune of trying to bottom fish in the energy patch. What, you don’t like losing money or something?

The question circling the minds of the thinking class is when will oil be free? I mean, it does go down Every. Single. Day. It’s only a matter of time before Ford starts rolling out tank sized trucks.

Here’s a date to remember: September 21^st, 2016. And why is that date significant? Because that day is when crude oil finally hits the impenetrable support level, the final bastion of strength known as zero. What a projection, right?

I know. You’re welcome.

Here’s the secret behind it. I drew a linear regression line starting at the peak in oil on August 29, 2013 (Oil was at $112.24) through today (Oil is at $36.14). The regression line captures the essence of the trend over that time frame and projects it forward in time. Which is to say if oil keeps dropping at the same pace set over the past two years it’s destined to nail zero late next year.

“Hogwash!” you say. Oil is a limited resource. Surely supply will dry up long before it hits zero as oil producers either go belly up or turn off the unprofitable spigots.

I agree, son. But let me have my fun. Because, it’s honestly getting ridiculous how relentless the decline in oil is getting here. And perhaps my disbelief, no, disgust, with oil’s inability to rise for more than a nanosecond is leading me to la-la land.

Actually I’m engaging in a bit of psychological trickery. I often do this with expenses in the real world. Like if my wife goes shopping I tell myself, “surely, she’ll spend no more than $500.” Then when she only spends $400, I feel like I saved money!

Or, when I get a medical bill in the mail before I open it I say, “gee, I hope it’s less than $1000.” Then when it’s only $500 I get a happiness boost. So now that I’m convinced oil is going to zippo I’m going to be so pleased when it bottoms in the low 30s or mid-20s.

Now, the irony of oil’s rally the past two days (I’m writing this the week before Christmas) isn’t lost on me. Might today’s rantings be a sign of peak pessimism in crude and thus a sign of its imminent bottom? Maybe, but I doubt it. That would be just too comical. But that brings up a good point on sentiment. Once the world finally decides an asset is never going up again, it usually does. The scariest times to buy something are usually the best times to do it.

Like in 2009. Getting bullish on crude was Freddy Krueger scary. But it paid out insanely well over the ensuing years. I suspect a few years from now we’ll say the same thing about the 2014/2015 oil crash. The question, then, is how to best dip our toes in the oil patch (if you’re not already). If you’ve yet to meet the usual suspects allow me to introduce them. There’s always crude oil futures for you day trading addicts (/CL). A slightly less leveraged approach would be playing with options on oil futures. Tamer still would be USO, USO options, or the suite of energy stock ETFs (XLE, XOP, OIH).

USO is probably the easiest to sink your teeth into for an almost-direct bet on crude. But it has a few issues. And it’s high time USO split.

Yes, I said split! More next time.

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