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Crude Oil Outlook: Check Your Crazy Hat At The Door
Will oil prices revisit $80 soon?
There are some jobs out there where having a split-personality would seem to actually improve your work performance. What got me thinking about that was the recent Dr. Jekyll and Mr. Hyde-like collage of news headlines regarding the presumed relationship between crude oil and equities.
If you've followed the markets over the past few weeks, you've seen it, too: One day, the mainstream media experts see rising energy prices as a major ally to the U.S. stock market -- only to see them as stocks' mortal enemy the next.
The following stories from the last two weeks in October 2009 capture the dual nature of the "market fundamentals" beast:
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"Oil Rally Helps Boost Street" (MarketWatch) AND -- "Dow Bounces On Higher Oil" (Reuters)
-- VERSUS --
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"US Stocks began the fourth quarter in a precipitous decline... Oil in the triple digits would crush consumer confidence and possibly even crush our markets." (Wall Street Journal)
-- VERSUS --
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"US Stocks Turn Firmly Up As Oil Rebounds." (MarketWatch)
-- VERSUS --
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"Nervous About High Oil Prices... The rising cost of oil could damage the world economy, just as it begins to rebound." (Reuters)
-- VERSUS --
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"Jump In Crude Oil Prices Helps Lift Stock Market" (Associated Press)
"Fundamental" analysis can truly be a "MAD" science -- if not just a maddening one. Fortunately, there's an alternative: Technical insights of Elliott wave patterns in market charts.
After four months of being locked into a sideways range of $65 to $75/barrel, oil finally broke above $80 on October 12. Three days prior, in the October 9 Energy Specialty Service daily forecast, EWI's long-time editor Steve Craig got behind the mic to record a video update presenting crude's bullish close-up alongside this message:
"Because it's such a nice triangle, I'll give the markets more room on the upside here... I'd like to see the market just explode up and out of here to get a good triangle thrust going."
If you're new to Elliott wave analysis, a triangle is an overlapping five-wave pattern labeled A-B-C-D-E. They always appear in the final actionary wave of one larger degree -- such as wave 4 of a basic 5-wave Elliott wave impulse Most importantly, triangles usually resolve in a sharp, swift move in the direction of the preceding trend.
So, what are you waiting for? Check the crazy hat at the door and get invaluable insight on crude oil for every time frame: daily, intraday, weekly, and monthly. Personalize your Energy Specialty Service package today.