Oil Chart with Fibonacci Retracements

Below we highlight a Fibonacci Retracement chart of oil since the low of $16.7 that it made in late 2001.  These retracement levels represent the percentage of the gains made from '01 to '08 that have been given up since oil's peak, and many technicians use them as key support levels.  However, with the way Fibonacci has been working for all asset classes in recent months, we'd use this for informational purposes instead of for trading purposes. 

As shown, after blowing through the 38.2% and 50% retracement, oil is now about to test its 61.8% level of $66.58.  This means oil has now given up 61.8% of the gains it made during its run from $16 to $147 over the last seven years.  At least we can rejoice in the decline of something.

Comments

[Paul Killinger:]

Deflation's a tough customer!

2008 Oct 23 10:34 AM

[NOWHEREMAN:]

Iran VS Israel is still on the table and the .618 retrace is in place. If Opec does cut 1.5 to 3 mil., oil will at the very least stabilize. The big question becomes the effect on currencies of the resource nations and commodities in general.

Is the Loonie a major buy?

2008 Oct 23 11:01 AM