Oil: How High Will It Go?
March 3rd, 2011WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
Some emails have been stacking up with regard to what’s happening with oil prices. In summary, people are wondering, “How high will it go?” and “How bad could this get?” and “Is this it?” etc.
As you know, I ignore fundamentals when attempting to forecast (guess) commodity prices. It’s straight technical analysis for me. As such, the answer to the question on oil was presented back in early November in, Oil Could Be On Brink Of Terrifying Move Higher. I wrote, “This is the most frightening chart I’ve posted in a couple of years.” Oil (WTI) was $87.13 back then. WTI is $102.50 right now.
There’s no good resistance until the $140 zone, where the previous high is. Now, if oil closes the gap, going for the previous high, it will mean that the dollar will break down substantially from here. The dollar’s problems are so severe that it appears to have lost its desirability as a safe harbor during geopolitical crises.
For right now, though, we may catch a short term pullback on oil because the U.S. Dollar Index is nearing a long term support and indicators are diverging in a way that leads me to believe that it “sees” the support. If that fails, a move below about 76 opens the door to it reaching the all time low of 70.792 in March 2008. If that happens, you’ll be seeing the EMERGENCY prefix on posts again. That will mean the wheels are coming off the cart (as they did in 2008).
Really quick on gold and silver: They are both up and out of their previous ranges. They’re not concerned with potential support ahead on the dollar—so far.
Wasn’t it Goldman Sachs who had all those tankers filled to the brim and parked all over the world. It’s BS.
Did I say it’s BS?
It’s BS.
https://cryptogon.com/?p=6324