Oil - It's in Everything!

2019年8月12日

Oil broke-out of a major 20+ yr. consolidation phase during the summer of 2004 at ~ $40. Fibonacci advancement levels proved important indicators to keep an eye on. Those being $64, $104 and $144. Once the peak in oil at ~$144 happened - Oil did what was considered normal to do - Retest the Break-out! This is exactly what it did. In 2009 oil was bouncing off key support levels of $40. A subsequent rise back to the $104 level and from there consolidation. What was showing as an upward wedge formation proved challenging due to the impending shale boom here in the United States. A collapse again to retest the $40 support level proved beneficial for oil from a long-term perspective.

This chart is a text book example of many technical indicators.
- 3 distinct trend channels
-Break-outs
-Re-tests
-Wedge formations
-Fibonacci Advancement and Support levels
-Reverse Head and Shoulders formation

Now oil is finding itself once again inside the structural trend channel dating back from 1983 when oil was at $31 a barrel!

What this shows is that Oil tends to follow inflation. Over the last 36 years oil has advanced at an annual 1.80% rate while EXACTLY matching the long-term GPD rate going back 244 years at 1.79%.

It’s simple and clear! The Trend is Your Friend.

Stay educated, have an opinion, make a decision, and keep it focused to what you know.