Oil Up $6 to $104

Somewhat lost in the mix today is oil's rise of $6, back above $100.  As shown in the chart below, however, the commodity is still in a solid downtrend.  For oil to break its downtrend, it needs to move and close above the $108-$109 level.

Comments

[investor88:]

Good article here lest we believe a new bull for oil has started after it closed above usd100. Notice gold is down. The theory of deflation for commodities [and oil] that some people have expounded is still alive unless proven otherwise.

2008 Sep 19 10:01 PM

[DougM:]

The bailout being worked over the weekend is likely to be inflationary.

2008 Sep 20 12:25 AM

[Shiv139:]

What are the cyclical opportunities for out-performance? When will the out-performance from secular growth sectors re-commence?

This article looks at out-performance opportunities at a sector level. The aim is to identify where we are in the economic cycle and use history as a guide to seek out the coming sectors of out performance, within the present economic cycle.

The article also applies the sector rotation rationale applicable to an economic cycle to a multi-economic-cycle level; the aim being to identify the secular (16 year; roughly 3 economic cycles) trends. The intent is to identify sectors which are in secular bull formations and which will lead during the next cyclical bull.

Sam Stovall's vision on sectors is used in identifying the typical flow through sectors during the course of an economic cycle.

The conclusions are - out-performance opportunities are in financials & IT. Secular sector to lead the next cyclical bull will continue being Energy after a cyclical correction.

2008 Sep 20 10:00 AM

[bill d:]

I knew it. As soon as gas became absurdly underpriced or under priced or under-priced the demand would soar and oil prices would skyrocket.

2008 Sep 20 02:22 PM

[User 153975:]

Actually, oil is still in an uptrend if you look at a chart with a longer time span. The chart shown in the article portrays a short term correction in a long term uptrend. China stopped buying most commodities because they wanted to reduce pollution for the Olympics by idling industrial production. Now that the Olympics and Paralympics are over, they may resume buying commodities, especially crude oil. I am looking for opportunities to get long oil and short airlines, casinos, etc.

2008 Sep 20 03:37 PM

[Duude:]

We've two major factors affecting the worldwide price of oil. One is the perceived and real world economic slowdown and the other is the value of the dollar. While I can see the world economic slowdown continuing, the dollar is likely to face new resistance due to the monumental cost of bailouts. Add to this any new and/or real production cuts in oil production out of OPEC, and any unexpected temporary stoppage (Nigeria) and we will arrive at our new average price.

2008 Sep 20 04:58 PM

[redbaron:]

153975: Right On! If one takes a longer term chart, oil is still in an uptrend, and that uptrend line has not yet been broken.

2008 Sep 20 07:39 PM

[CLH:]

Oil was in a bubble phase from 2007 until this summer. This bubble is broken and the price should go down to at least $80. Because prices overshoot on the both the up and down side, I expect to see oil to at least $50. The world wide recession will make sure this happens. Forget inflation --its not there. Dollar up commodites down. Bespoke is right

2008 Sep 20 08:20 PM

[billp37:]

Anyone believe in market manipulation?

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2008 Sep 20 08:53 PM

[anarchist:]

CLH, we can tell your don't do the grocery shopping in your family. Inflation is here baby and this bailout scratches it in stone

2008 Sep 22 10:53 PM