Guess all that rate cutting and money pumping will stoke inflation.
Curde up 10.00% today 11-04-08.. $70.03
- Thread starter Aaron Copland
- Start date
It'll be down 10% tomorrow. Welcome to volatility!
3 things, first look at a monthly continuation chart. take the late 1998 low of $10 and the 2008 high of $147 and draw a fibonacci retracement. The 61.8 area has held very nicely as support.
Now draw a trendline on the same chart from the 2003 low to the 2007 low and it crosses the same area as the fib support.
Also note that crude has a recent correlation to the S&P of like 80%. We should get a decent short covering post election relief rally here, that should bring crude along with it.
As far as oil being too cheap here, I ultimately think crude will hit $40 within 12 months or less. The global decimation of wealth will have longer lasting implications to commodity demand, my opinion of course. Commodities always overshoot the upside in a bull market, and the downside in a bear market.
Now draw a trendline on the same chart from the 2003 low to the 2007 low and it crosses the same area as the fib support.
Also note that crude has a recent correlation to the S&P of like 80%. We should get a decent short covering post election relief rally here, that should bring crude along with it.
As far as oil being too cheap here, I ultimately think crude will hit $40 within 12 months or less. The global decimation of wealth will have longer lasting implications to commodity demand, my opinion of course. Commodities always overshoot the upside in a bull market, and the downside in a bear market.
Crude has broken through the 61.8% fib support now, if we settle sub-$61, my next area is $54.70 followed by $50.50