Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Coronavirus Pandemic Vaccines Indicator Current State - 3rd Mar 21
AI Tech Stocks Investing 2021 Buy Ratings, Levels and Valuations Explained - 3rd Mar 21
Stock Market Bull Trend in Jeopardy - 3rd Mar 21
New Global Reserve Currency? - 3rd Mar 21
Gold To Monetary Base Ratio Says No Hyperinflation - 3rd Mar 21
US Fed Grilled about Its Unsound Currency, Digital Currency Schemes - 3rd Mar 21
The Case Against Inflation - 3rd Mar 21
How to Start Crypto Mining Bitcoins, Ethereum with Your Desktop PC, Laptop with NiceHash - 3rd Mar 21
AI Tech Stocks Investing Portfolio Buying Levels and Valuations 2021 Explained - 2nd Mar 21
There’s A “Chip” Shortage: And TSMC Holds All The Cards - 2nd Mar 21
Why now might be a good time to buy gold and gold juniors - 2nd Mar 21
Silver Is Close To Something Big - 2nd Mar 21
Bitcoin: Let's Put 2 Heart-Pounding Price Drops into Perspective - 2nd Mar 21
Gold Stocks Spring Rally 2021 - 2nd Mar 21
US Housing Market Trend Forecast 2021 - 2nd Mar 21
Covid-19 Vaccinations US House Prices Trend Indicator 2021 - 2nd Mar 21
How blockchain technology will change the online casino - 2nd Mar 21
How Much PC RAM Memory is Good in 2021, 16gb, 32gb or 64gb? - 2nd Mar 21
US Housing Market House Prices Momentum Analysis - 26th Feb 21
FOMC Minutes Disappoint Gold Bulls - 26th Feb 21
Kiss of Life for Gold - 26th Feb 21
Congress May Increase The Moral Hazard Building In The Stock Market - 26th Feb 21
The “Oil Of The Future” Is Set To Soar In 2021 - 26th Feb 21
The Everything Stock Market Rally Continues - 25th Feb 21
Vaccine inequality: A new beginning or another missed opportunity? - 25th Feb 21
What's Next Move For Silver, Gold? Follow US Treasuries and Commodities To Find Out - 25th Feb 21
Warren Buffett Buys a Copper Stock! - 25th Feb 21
Work From Home Inflationary US House Prices BOOM! - 25th Feb 21
Man Takes First Steps Towards Colonising Mars - Nasa Perseverance Rover in Jezero Crater - 25th Feb 21
Musk, Bezos And Cook Are Rushing To Lock In New Lithium Supply - 25th Feb 21
US Debt and Yield Curve (Spread between 2 year and 10 year US bonds) - 24th Feb 21
Should You Buy a Landrover Discovery Sport in 2021? - 24th Feb 21
US Housing Market 2021 and the Inflation Mega-trend - QE4EVER! - 24th Feb 21
M&A Most Commonly Used Software - 24th Feb 21
Is More Stock Market Correction Needed? - 24th Feb 21
VUZE XR Camera 180 3D VR Example Footage Video Image quality - 24th Feb 21
How to Protect Your Positions From A Stock Market Sell-Off Using Options - 24th Feb 21
Why Isn’t Retail Demand for Silver Pushing Up Prices? - 24th Feb 21
2 Stocks That Could Win Big In The Trillion Dollar Battery War - 24th Feb 21
US Economic Trends - GDP, Inflation and Unemployment Impact on House Prices 2021 - 23rd Feb 21
Why the Sky Is Not Falling in Precious Metals - 23rd Feb 21
7 Things Every Businessman Should Know - 23rd Feb 21
For Stocks, has the “Rational Bubble” Popped? - 23rd Feb 21
Will Biden Overheat the Economy and Gold? - 23rd Feb 21
Precious Metals Under Seige? - 23rd Feb 21
US House Prices Trend Forecast Review - 23rd Feb 21
Lithium Prices Soar As Tesla, Apple And Google Fight For Supply - 23rd Feb 21
Stock Markets Discounting Post Covid Economic Boom - 22nd Feb 21
Economics Is Why Vaccination Is So Hard - 22nd Feb 21
Pivotal Session In Stocks Bull Bear Battle - 22nd Feb 21
Gold’s Downtrend: Is This Just the Beginning? - 22nd Feb 21
The Most Exciting Commodities Play Of 2021? - 22nd Feb 21
How to Test NEW and Used GPU, and Benchmark to Make sure it is Working Properly - 22nd Feb 21
US House Prices Vaccinations Indicator - 21st Feb 21
S&P 500 Correction – No Need to Hold Onto Your Hat - 21st Feb 21
Gold Setting Up Major Bottom So Could We See A Breakout Rally Begin Soon? - 21st Feb 21
Owning Real Assets Amid Surreal Financial Markets - 21st Feb 21
Great Investment Ideas For 2021 - 21st Feb 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Commodity Forecasts for Crude Oil and the AMEX Oil Stocks Index

Commodities / Crude Oil Aug 21, 2009 - 06:36 AM GMT

By: David_Petch

Commodities

Best Financial Markets Analysis ArticleOil - The daily chart of the oil is shown below, with all three upper Bollinger bands riding above the index, while the lower 21 MA BB is rising to meet the index. The lower 34 and 55 MA BB’s are in close proximity to each other and the 34 MA BB should begin to rise if a moderate leg down were to occur. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K above the %D in 2 and 3. Based upon positioning of the %K in stochastic 2, there is no clear indication that the oil has completed its topping formation just yet.


Figure 1

Figure 1 copy.gif

The weekly chart of oil is shown below, with the lower 21 and 34 MA Bollinger bands continuing to rise upwards to the current price. When upper and lower 21 and 34 MA BB’s contract towards each other, it is an indication of a significant reduction in volatility which thereby sets the stage for another major move, whether it be to the upside or downside. Positioning of the 21 and 34 MA BB suggest the potential for another 1-3 weeks of sideways action before topping out. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K above the %D in 2 and 3. In order for a top to become “qualified” on the weekly chart, the %K must curl over and fall beneath the %D…this event is at least 2-4 weeks out, so my initial estimation for a true top being put in place might be rather conservative.

Figure 2

Figure 2 copy.gif

The monthly chart of the oil is shown below, with all three upper Bollinger bands drifting above the 2008 highs, indicating the significant overhead resistance…there is at least another 12-18 months of consolidation before oil can even consider advancing above $100/barrel. Lower 21 and 34 MA BB’s are well beneath the index, indicating a low was put in place back in 2008. The lower 21 MA BB is starting to curl up, suggestive that the lower 34 MA BB will also follow suit…I anticipate a 2-3 year consolidation at least for oil between $55-90/barrel before any sort of breakout occurs and again, this is based upon the huge spread between upper and lower Bollinger bands. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K beneath the %D in all three instances. Based upon stochastics, it again confirms suspicions about how long the consolidation in oil really takes.

Figure 3

Figure 3 copy.gif

AMEX Oil Index

The daily chart of the XOI is shown below and has a similar Bollinger band setup to oil…all upper BB’s well above the current price, the lower 21 MA BB is at or near the index while the lower 34 and 55 MA BB’s are in close proximity to each other, suggestive that more time is required to set the stage for a reduction in volatility in order to really “trigger” the next decline. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K above the %D in 2 and 3. Until the %K in stochastic 2 falls beneath the %D, there is no indication that a top has been put in place. For those playing oil stocks, I will again mention that the easy money was made back in March and now the risk simply outweighs the reward. It is also important to point out that the S&P 500 index has a similar pattern to the XOI, so this chart provides a window into what is going on there too.

Figure 4

Figure 4 copy.gif

The weekly chart of the XOI is shown below, with upper 21 and 34 MA Bollinger bands riding above the index, while lower 21 and 34 MA BB’s are also approaching. The lower 55 MA BB requires another 1-3 weeks of time to continue rising up to a point where there is enough reduction in market volatility to trigger the next leg to the upside or downside (looking for downside coming up). Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K above the %D in 2 and 3. The %K in stochastic 2 is still rising and pointing up, so until it curls down sharply and approaches falling beneath the %D a top has not yet been put in place. Again, I want to stress how everything is linked to how the USD performs over the course of the next 1-3 weeks. As long as the USD continues to base at present levels before theoretically heading higher, everything else will remain in a topping process.

Figure 5

Figure 5 copy.gif

The monthly chart of the XOI is shown below, with lower 21 and 34 MA Bollinger bands falling beneath the index, suggestive that 2008 lows could potentially hold (the XOI may just go sideways for longer than most anticipate). Upper Bollinger bands are still riding well above the former 2008 highs, indicating strong upper resistance. All three lower BB’s are going to reach a focal point sometime over the course of the next 12-18 months, which will represent a good time to establish positions in companies that make money. During this current market environment, if a company is not making money or is far from it, avoid them like the plaque because investment capital is going to become even tighter in the coming 12-24 months. Once the stock markets bottom, economies typically bottom 12-18 months after…so 2011-2012 is when the decession is over (Note: I did not intend a spelling error there). Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K beneath the %D in all three instances. Notice how the 12-18 month time frame fits with extrapolation of the %K trends below to indicate a bottom was put in place?

Figure 6

Figure 6 copy.gif

The mid-term Elliott Wave count of the XOI is shown below, with the former thought patterns forming denoted in green. Obviously the last decline did not pan out and the XOI shot to the upside. If the XOI tops out in 2-4 weeks, then the labeling scheme I chose is appropriate. Any further extensions in time and I will have to rework the count. One thing about using Elliott Wave analysis or NeoWave (what I use) is to never fit the count to what you think is going to happen, rather, try to work the count based upon the surrounding wave structures. I like to include the former charts and technical’s because it paints a much better picture for how and where the market is with respect to volatility (Bollinger band analysis) and trending patterns (positioning of %K relative to %D) on daily, weekly and monthly charts. Throw in good wave analysis and it provides a much better picture.

Figure 7

Figure 7 copy.gif

The long-term Elliott Wave count of the XOI is shown below, with the thought pattern forming shown in green. Another 2-4 weeks out should see the XOI decline in a similar pattern to what is shown below to retest the 2008 lows. Does this happen…who knows, but based upon the wave structure thus far, that is what it is implying.

Figure 8

Figure 8 copy.gif

Well, that is all for today…I will update two different indices tomorrow morning. Have a great day.

By David Petch

http://www.treasurechests.info

I generally try to write at least one editorial per week, although typically not as long as this one. At www.treasurechests.info , once per week (with updates if required), I track the Amex Gold BUGS Index, AMEX Oil Index, US Dollar Index, 10 Year US Treasury Index and the S&P 500 Index using various forms of technical analysis, including Elliott Wave. Captain Hook the site proprietor writes 2-3 articles per week on the “big picture” by tying in recent market action with numerous index ratios, money supply, COT positions etc. We also cover some 60 plus stocks in the precious metals, energy and base metals categories (with a focus on stocks around our provinces).

With the above being just one example of how we go about identifying value for investors, if this is the kind of analysis you are looking for we invite you to visit our site and discover more about how our service can further aid in achieving your financial goals. In this regard, whether it's top down macro-analysis designed to assist in opinion shaping and investment policy, or analysis on specific opportunities in the precious metals and energy sectors believed to possess exceptional value, like mindedly at Treasure Chests we in turn strive to provide the best value possible. So again, pay us a visit and discover why a small investment on your part could pay you handsome rewards in the not too distant future.

And of course if you have any questions, comments, or criticisms regarding the above, please feel free to drop us a line . We very much enjoy hearing from you on these items.

Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities as we are not registered brokers or advisors. Certain statements included herein may constitute "forward-looking statements" with the meaning of certain securities legislative measures. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the above mentioned companies, and / or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Do your own due diligence.

Copyright © 2009 treasurechests.info Inc. All rights reserved.

Unless otherwise indicated, all materials on these pages are copyrighted by treasurechests.info Inc. No part of these pages, either text or image may be used for any purpose other than personal use. Therefore, reproduction, modification, storage in a retrieval system or retransmission, in any form or by any means, electronic, mechanical or otherwise, for reasons other than personal use, is strictly prohibited without prior written permission.

David Petch Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules