Why Crude Oil should correct NOW … (chart)
- OPEC insists, that we should all have sufficient oil …
- fundamentally demand is contracting in the U.S. the first time in 15 years …
- even China has lowered its imports …
- every bullish study and story is told …
So let’s look at the chart … as we know … the trend is your friend until the bend at its end 
And what brings it often to an end???
CLUSTERS of resistance … combined with overspeculation and sometimes even a kind of a spike …
And HERE WE ARE 
After the June contracts expired, we had our spike … showing, that the market wants to be in crude NOW … nobody thinks short
Goldman looks quite conservative now in the mind of the market.
Have a look on this monster rally below …
Copyright by Tradestation
The rally started at the start of 2007 … had its acceleration starting August 2007 … formed then a “measuring”W”" … and now even reached a full 100% extension of the initial move … as well as a 161% extension of the smaller, but steeper move.
So far … so good …
Where should we expect to go now?
My first target is the 102-105$ area … 2nd target 93-96$ … 3rd target … 81-85$ …
By the way … don’t forget, that the price of OIL is positively correlated to stocks … only quick spikelike moves irritate the stock market
So … I am bearish for crude oil … bearish for stocks … and … I have to admit that … even bearish for BONDS … as I think, interest rates MUST go up … inflation is ramping and as we see … it needs a lot of time to see inflation coming and going … so even lower Oil prices won’t curb inflation numbers soon …
Have a relaxing long weekend (long, if you live in the U.S.)
Mai 23rd, 2008 at 18:46
“So … I am bearish for crude oil … bearish for stocks … and … I have to admit that … even bearish for BONDS … as I think, interest rates MUST go up … inflation is ramping and as we see … it needs a lot of time to see inflation coming and going … so even lower Oil prices won’t curb inflation numbers soon …”
So where do you leave your money? In USD$ ? Ben will be drooling to carve up your worthless paper even further.
Mai 23rd, 2008 at 19:16
I don’t think oil prices will really crater unless and until the Fed takes a stern stance against inflation and actually raises interest rates. The recent sub-prime induced panic by the Fed, and the resulting low interest rates they put in place, have helped (aided and abetted?) speculators in the commodities arena, thus helping to drive oil and other commodities inexoraby higher. So, I don’t look for oil truly to break down anytime soon. Yes, perhaps a near-term correction is in the cards, but until interest rates are genuinely increased, oil and other commodities will remain high. It could get quite frothy, too, especially if you throw in some geopolitical events which the presidential election just may foment… Just my opinion, of course!