Parabolic Move In Crude Oil Looks Extended

This is a bit of a stretch, but a comparison of the current price of crude oil futures and the Dow Industrials from 1987 would indicate that crude is getting a bit extended.

The following shows a daily chart of crude oil futures hitting a DeMark Sequential 13 count. After an already strong run higher, crude has gone parabolic in the past two weeks. This type of advance is not sustainable and often leads to a price collapse.

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The Dow Industrials in 1987 traced out a similar parabolic pattern on the final run to the highs and began rolling over shortly after hitting a DeMark 13.

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In addition, the following chart indicates that the weekly chart of crude futures have also hit a DeMark 13, although the price has run a bit further than I would like.

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All in all, it looks like crude could begin a multi-week process of rolling over after its astounding run. If you bet against crude, remember to use a reasonable stop or wait until price breaks down. Parabolic moves can often run much further than you imagine.

Comments

[richjoy]

OK, I agree crude is due for a pull-back.

The issue is really (a) how far?; and (b) for how long before it resumes its upward climb?

A pull-back would be welcome; a lot of folks are being hurt by shifting income to fuel from other needs.

But it they think gasoline is going back to $2/gal., or that it gas will fall to $2.50 and stay there for a year; I think they are going to be disappointed. Gas at $5+/gal. is on the horizon...6 months, 1 yr?, 2 yrs?

The same can be said for a the commodities and materials.

[Ker]

Oil is not parabolic yet. Parabolic will be from 200 to 1000 in 3 months. There is no top for oil, oil is going to skyrocket: www.lifeaftertheoilcra.../
however 115 must be revisited before going higher

[RobertSczech]

It is not the price of oil which is parabolic. It is the demand for oil which is going parabolic. The world consumes more than 84 million
barrel of oil per day which is insane. At that rate (equivalent to 40,000 gallons per second), all the oil will be gone within a few decades.

[richjoy]

Mr. Sczech:
So, you believe in Peak Oil...OK, maybe it is the case...however:

Isn't it true that just a year ago, there was no giant oil field off the coast of Brazil, but now there are two giant fields. (same applies to the new field in the southern Gulf of Mexico).

No one knows how much oil is yet to be found in waters much deeper than we had the technology to find just a couple years ago. Also, at $80, 90, $100/barrel, it is now economical to look in places we did not look before. Technology marches on.

Therefore, I for one, don't think you can be so certain when the oil will be gone.

[maher]

What? "Someone in OPEC will stand has stand up in a closed door meeting" and face Iranians? Are you kidding me??! You are in La La Land, baby.

It has nothing to do with fundamentals, buddy boy, it has everything to do with the coming military strikes on the Iranian regime and its terrorists-

Wait until Hormuz strait is mined or bombed, and I will tell you if $200 is a bargain then or not.

You novice writers take one face out of a hundred faces of a cut diamond and claim to "have the truth"??! Puaaah!

It's Iran stupid!