Crude--Monday morning, July 24, 2008
Returning to the pattern with the July 2006 high at 78.40 as alpha and January 2007 low at 49.90 as beta. Target would now be 170.70.
July 14, 2008
July 3, 2008
Crude Oil--Stock Futures Correlation
A chart showing the correlation between movements in stock futures (S&P) and oil futures over the course of one trading day, Wednesday, July 2, 2008 (chart covers trading day in stock market--9:30 AM to 4:00 PM). Data is percentage move from opening (i.e. 9:30 AM) price. The oil futures line is inverted. This is based on 5 minute price data. I admit to being slightly astonished at how closely stock futures shadowed oil on an intraday basis. Wednesday, July 2, was the day the media talked about U.S. stocks entering bear territory. They seemed to have been led there by the nose by the oil market.
May 9, 2008
Crude--Friday Morning, May 9, 2008
Crude has overshot the delta 2.618 target
Allowing for (1) the extent of the move (from under 50 dollars to the area of 125 dollars) and (2) the inaccuracies inherent in a chart composed of monthly changing nearby contracts, it is still within the zone of the pattern. But we have to be ready for this pattern to be proven invalid. Hasn't quite happened yet though.
May 8, 2008
Crude--Thursday Morning, May 8, 2008
June contract traded at 123.93 yesterday evening. Flat with a slightly downward bias since then, but support coming in around the 123 handle.
Anything above 1.24 will be close enough to be in the "zone" of the 1.2451 delta 2.618 target. In fact, the high already in might be in that zone.
To recapitulate the pattern:
Alpha at 78.40 in July of 2006.
Beta at 49.90 in January of 2007.
A test of the alpha high in August of 2007.
After a pullback, the alpha high is breeched in the later half of September of 2007 and then that level provides support for a few weeks.
In October begins an impulsive move up to the delta 1.618 target. That level is surpassed, but from November 2007 until February 2008, the market zig zags with resistance a few dollars above the 96.00 delta 1.618 target (specifically the 100 level) and support at the 1.272 level.
Then in early February a new impulsive move begins, bringing us 13 weeks later approaching the delta 2.618 target.
On a daily chart, the move between 1.272 and 2.618.
UPDATE THURSDAY AFTERNOON--5:45 PM
After selling off through the morning, the market bottomed around 11:30 AM under 122, and by 2:00 PM was breaking towards the highs again. Popped over 124 right after 3:00 PM. Around 4:00 PM hit 124.61. It has been trading sideways around 124.50 since then.
A five minute chart:
And once again, the weekly chart (with delta 2.618 target met):
Since this is a long term pattern going back to mid 2006 (and a low below $50.00) it is probably wise to give this target a little room. The market could go up up above 125.00 and the pattern would still be valid. What is important now is to look for signs of topping at this general level.
May 5, 2008
Crude Oil--Monday Afternoon, May 5, 2008
Unlike gold and bonds, both of which reached impulsive peaks at the climax of the Bear Sterns panic mid-March, the Crude Oil chart never reached its (2.618) goal. That period showed a high around 111.80 in the nearby contract. By the end of that week the contract had fallen under 100. The impulsive goal not having been met at that time, it has been the one market to rally beyond the panic high of March. Today a new high.
The target area is still centered on 124.50.
Once that target is met, and crude joins other commodities in a downturn, there could be an acceleration of the general decline.
April 30, 2008
Weekly Crude Oil
Nearby future on a weekly basis.
