Wednesday, December 26, 2007

Bullish Crude Oil Cycle



I meant to post the above chart the other day but it slipped my mind due to the holiday. As you can see a cyclical low is due now so I am bullish on oil. The month of January is also a very bullish month for crude oil on a seasonal basis so I expect oil prices to move higher over the next few weeks.

The above chart is how USO (crude oil ETF) looked the other day when I printed out the chart. The above chart doesn't reflect what crude oil did today which was rally and close at 75.91.

5 comments:

Ram said...

Happy new year, Kevin. Thank you for your great work all year. I always appreciate your even-handed (and level-headed) approach to deal with the fickle markets. Would you comment on what you think January may bring in the coming days, particularly the US and Chinese stock markets?

Woody said...

Hey Kevin. I frequent your site often and always enjoy the insight you give and the informative charts. I saw that you posted the bullish oil chart and normally I'm a oil bull myself my I recently turned bearish after looking at some oil stocks and the commidity itself. I'm of the opinion we're about to experience a nice 20% correction in oil as it looks well over bought. Curious if you've looked any technicals besides the timing factor. Any thoughts are a appreciated.

Kevin said...

Happy New year Ram and Woody...

Woody, I do look at other technical tools such as price patterns (head and shoulders)..etc. but in my opinion, time is more important than price. If the time is right, the market will be ready to move. So over the years I've learned to focus a lot on time and then I'll bring in the price patterns to confirm my forecast. My favorite price pattern is a pullback in a trend and that is what I think oil is doing right now.

kk said...

Hi Kevin,

Thank you so much for all the information you posted!!!

As to oil, if I remember clearly 2007 Jan we saw a huge leg down in oil due to portforlio rebalance. I totally agree with you that Jan is a bull month for oil. But is it possible that the hedgefund rebalance again in Jan 2008? Thanks a lot!

Woody said...

I'm bullish on Oil again... just wondering if you have any thoughts.

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