Last four times oil did this, huge rallies occurred "Veteran strategist Thomas Lee, who's made several contrarian calls which have evolved into great buying opportunities, is predicting an oil rally will soon wipe out losses from the latest downturn.
He says oil futures are on the verge of moving into "backwardation," a term used to describe a market anomaly when futures contracts that expire later are trading at lower prices than contracts that expire sooner.
The last four times oil moved into backwardation, the commodity rallied between 25 percent and 72 percent in the next nine months, according to Lee.
"We're approaching a flip back into backwardation, meaning the spot price is approaching and may soon exceed the 24-month contract. That's normally a market imbalance," said Lee, who is Fundstrat's Head of Research, on Wednesday's "Trading Nation."