It’s now obvious that crude oil has started to back off or decline. What shape this decline is going to be is unknown but a bullish correction can retrace by about 60% of the entire bullish move. Many times we can just eyeball it to give us a quick look which looks like it could be at about the $53-$55 price level.
We do have a little spike forming already but crude oil will have to produce a much bigger spike before I’m convinced that crude oil is going to soar to the moon.
Crude oil is the commodity that is destroying the world yet it supplies about 80 percent of all the food we eat at our dinner tables. The war on fossil fuels seems to have picked up lately as some countries are on the verge of declaring a “Climate Change Emergency”.
I’m sure declaring any “Climate Change Emergency” in your local area will keep the tourist away for a long time. That’s just like yelling “Shark” at the beach during spring break! I guess the countries that are yelling, “Climate Change Emergency”, have never watched “Jaws”!
For now, the commercial hedgers do not paint a bullish scenario as they are still net short by a large amount. Until I see some of these numbers reverse I have to keep looking for a bearish wave count.
The Gold/Oil ratio improved lately but at 21:1 crude oil is far from being cheap, so wild fluctuations can keep any oil bears on his toes.