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
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelertoing Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Crude Oil Stocks Forecast 2013

Commodities / Oil Companies Jan 08, 2013 - 11:37 AM GMT

By: David_Petch

Commodities

This article was published for the benefit of subscribers on January 7th, 2013. The purpose of this article is to discuss what lies ahead in 2013. Areas not discussed are prior articles relating to 9 healthcare stocks in uptrends or the most recent update regarding the S&P 500 and AMEX Gold BUGS Indices. General concepts are shared in this article, with more detailed information and future dates kept for subscribers. We thought it was important to share this information to help guide investors for the turbulent period of time that lies ahead into 2014.


2013 Outlook

The price of oil has a very strong correlation to the economy, especially since Peak Oil was reached back in 2005. Before when there appeared to be unlimited oil, prices would only rise with inflation or increased expenses, so increases in demand would not really have much of an impact on prices. Peak oil however has an important caveat that oil can not be pumped out at a greater pace, in fact, declines start to kick in sharply once production of an oil field/well has peaked. Human kind has been able to extend the effects of peak oil by increasing the total volume of biofuels, increased use of natural gas, shale oil etc. but continual year over year increases in demand will soon reverse this short-term trend.

Since oil is directly tied to how well the general stock markets perform (which reflect overall economic activity), weakness in the broad stock market indices will at some point be reflected in the price of oil, which feeds back into the share price of energy stocks. The broad stock market indices are expected to perform well into the April/May 2013 time frame, which translates into oil prices remaining at present levels or heading higher. A top in the broad stock market will be the first indication that a top in oil prices loom 6-8 weeks after and this top is based upon the Contracting Fibonacci Spiral.

When I came out with the Contracting Fibonacci Spiral (CFS) theory that markets were trapped in back in July 2011, it has predicted broad stock market price action rather well (as the US Dollar) but has not been a good indicator for how gold stocks performed in 2012. Since the CFS predicts tops for broad stock market indices in the US (linked back to the 1934 bottom and subsequent adoption of the US Dollar as the global reserve currency), it serves as an indicator for when to exit the stock market before a sharp decline commences. A revised article on the original CFS piece described in July 2012 will tentatively be published in the April 2013 issue of Stocks and Commodities magazine. Some tweaking was involved with current ratios, which suggests a top in the broad stock market indices is due no later than sometime in May, 2013.

Based upon our timing model, the broad stock market indices top out first, followed by the XOI, HUI (precious metal stocks) and then oil and gold. There is a 2-3 month advance in commodities beyond the broad stock markets topping out due to higher prices causing an economic slowdown in the form of a feed-back loop. The CFS has called every major top since the 1934 bottom...every CFS time post indicates a top that follows a very sharp decline that may be brief (as per 1987) or long in duration (as per the 1966 top). Once the CFS top comes due between March and May 2013, commodities should peak no later than October 2013. Subsequently, there is a very sharp bought of deflation expected that will tentatively last until mid to late 2014, but since the current time post is on the flash crash line, the decline could be more rapid than any of us could imagine.

Gold has been languishing for some 16 months at present and is due for a move to the upside...but if history is any guide, any bout of deflation results in extreme liquidation of all assets, so being in cash, particularly US Dollars once positions have been exited accordingly appears to be the best play for the latter half of 2013. Gold will continued to be monitored on a weekly basis in all of our updates because when it does break above $1800/ounce, it has a projected move to $1950/ounce, followed by a back test of $1920/ounce and then off to new highs...there could be some unexpected twists going forward that will be discussed over the next few weeks. The bull market in gold still has another 7 years, which correlates to the termination point of the CFS. The barren desolate isolation of those holding precious metal stocks is going to slowly disappear as earning multiples of producers start to sharply rise with that of gold and silver over the coming months and years going forward.

With rising prices with also see a rising interest in governments looking to profit in any way that they can, whether it be through taxation or expropriation of property. This is why is very important to own gold stocks in countries that have political stability. The best countries to own gold stocks are in Canada, Brazil, US, Mexico and Australia. Mexico remains to be one country that could have a shift in policy, but this will not occur until near the very end when the wealthy have unloaded their precious metal stocks onto a dumbfounded public.

I will write more about this in the coming weeks, but the take home message is that precious metal stocks are finally set to slowly start an ascent to higher prices. The entire precious metal space is nearly as oversold as 2008, yet the broad stock market indices still remain near pre-2008 highs. The clear decoupling of precious metal stocks to the broad stock market indices may be very telling of what lies ahead over the coming months.

From analysis of 9 healthcare companies I have started to follow (most are blue chips), there is no indication of any top until the April-June 2013 time frame, which is consistent with analysis of most of the sectors I cover. Further analysis in this article focuses on the AMEX Oil Index to provide support that upside in the broad stock market indices is likely to continue to our mentioned dates. Once we pass the CFS time post and a topping process, a very sharp decline of at least 40-50% in the broad stock market indices is expected (as per all other prior time posts) before a bottom is put in place. Our focus is to take advantage of this recently discovered cycle for trading purposes to maximize profits and preserve wealth.

AMEX Oil Index

The daily chart of the XOI is shown below, with a noted gap up last week, suggestive that higher prices are looming. The lower 55 MA Bollinger band has curled down, which suggests further upside for another 3-4 weeks before any sort of a top is put in place. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K beneath the %D in 1 and above the %D in 2 and 3. Extrapolation of the %K in stochastics 2 and 3 suggest anywhere from 3-5 weeks before a top is put in place. The current move is likely to test the 2011 high of 1350 before having a partial retracement of the advance and breaks toward the 2008 high around 1600.

Figure 1

The weekly chart of the XOI is shown below, with upper 21 and 34 MA Bollinger bands in close proximity to each other, suggestive that further upward price action is likely. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K beneath the %D and above the %D in 2 and 3. Notice the %K in stochastic 1 curling up...this suggests anywhere from 4-7 months of upward price action before a top is put in place. The XOI has been in a sideways price action trend for the past two years (which is clearly denoted in Figure 10), which suggests a breakout to the upside or downside is looming. Everything that I follow suggests this breakout will be to the upside.

Figure 2


The monthly chart of the XOI is shown below, with a gap up in price so far for 2013. Full stochastics 1, 2 and 3 are shown below in order of descent, with the %K beneath the %D in 1 and above the %D in 2 and 3. Notice how the %K in stochastic 1 has curled up... this suggests at least another 5-7 months of upside before any sort of a top is put in place.

Figure 3

The long-term Elliott Wave count of the XOI is shown below, with the thought pattern forming denoted in green. The XOI is still in a triangle, to complete wave C.(B), with wave (C) to follow. It is possible that wave A after (A) is wave (X), wave B is A, wave C is B and wave C is to follow to complete wave [B]...either count is possible, with the coming high expected to touch the 2008 high...nothing more. This would correlate with the XOI and S&P 500 Index topping out around 16.50, with a 1:1 correlation. Once a top is put in place, expect a sharp decline in wave [C], which should coincide with a surge of strength in the US Dollar Index.

Figure 4

That is all for today...back tomorrow with an update of the HUI and S&P 500 indices, which will be one of the most important updates I have posted in a while. 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 © 2013 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