Monday June 26, 2017
The headline in the WSJ last week was
Oil Enters Bear Market, Down 20%
John Murphy has issued several reports suggesting the FED has it all wrong, nothing new in that of course, and that deflation not inflation is the problem
I would suggest that commodity markets have been in a nine year correction coming off the 2008 top with $145 oil. there is nothing new about this at all.
WTIC
Observe that we have equality of time at work here. From the low in 1999, the high occurred in 2008, nine years later.
From the high in 2008, we are now nine years out in 2017 coming up on a symmetrical low to equal that in time from 1999.
Also note this is also roughly a 17year cycle.
At top RSI has registered lower high s on each assault since the 2008 high
Finally MACD looks about topped out as does RSI. As stated, all of this seems to have just now dawned on the vast majority of observers. The headline in the WSJ last week. Oil Now in Bear Market is about nine years late.
The low actually occurred in December 1998 at $11. Will the market take until December 2017 to bottom this year?
As shown this weekend, on the two year weekly WTIC chart, MACD and RSI is still falling. We are nowhere near enough to call a low yet.
Today June 26 is likely to be a high in the stair step progression of the final leg of this bear market.
USO
The two hour chart shows a classic bear progression of lower highs and lower lows to the downside.
Today price is reaching to the upper level of the parallel downtrend line.
The Bottom Line
Our view is that the bear market in oil began in July 2008. A Wave A took it down to $35 ins six months. Wave B then rebounded to $110. A long sideways correction then ensued lulling the world into complacency. The world began thinking triple digit oil prices are the new normal, they are not. We now expect final lows to follow the nine year symmetry
nine years up 1999-2008
nine years down 2008-2017
DUG Energy Bear Fund
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