An Update on Crude Oil
posted Apr 1, 2006 at 03:22PM
Crude Oil Daily
As regular readers know I have been using a large triangle as the fundamental structure for crude oil. As of yet nothing has occured to make me change my mind.
If this is the correct structure then one can expect one last surge into trend-line resistance before on final consolidating down-leg.
Is it possible that oil will break-through at this time? Yes although I feel it would take a dramatic escalation with Iran to make this happen. The break-out in gold bullion certainly is a harbinger of the market sensing something big coming down the pipe.
Crude Oil Weekly
Crude Oil Long-Term
You keep hearing from bears about how "inventory levels are at their highest levels since 1999". Well when you go back to 1999 you will see that is when oil actually bottomed and the bull market was born.
I could argue that when reservoirs are bone dry and everyone is riding their bikes to work, that that will mark the top.
In the end this bull market has little to do with inventory levels. It has more to do with increasing global demand coupled with the uncertainty surrounding long term strategic supply soureces. All of this exacerbated by the US military presence in the Middle East.
George Bush has made it clear that he will not pull the troops out: that that will have to be the decision of a future President. There is no surprise here. It fits the pattern of this man's entire life. He turns what he touches to pure shit, and then leaves just in time to make sure someone else is holding the bag.