Crude Oil Intraday Gyrations Update

This morning crude oil also spiked to a new record before it backed off a bit. As I post a reversal is in progress so short term this recent high could still get retraced. The more violent, crude oil gets is the sign of a trend change that oil could be switching to. The price gap between this June contract and the December contract,  has compressed dramatically,  as the December contract is now only  a 65 cent difference.

The Gold/Oil ratio is also at record lows as it hit the mid 18:1 range since early April 2018.  Before oil crashed in 2014-2015 the Gold/Oil ratio managed to hit 17:1 so 18:1 is not that far away.  The entire world seems to be bullish on oil prices, as every price forecast imaginable is thrown at us. I’ve heard all this before  as this potential peak has happened two times before.  This will be my third oil, bearish phase I will be tracking and they all started with very high gold/oil ratios.

The WTI commercials are short oil, and even with the ICE futures they are in short positions. Until this scenario changes I remain bearish on oil.

Some only expect a pull back to $60 or so, but that is a very bullish corrective forecast. Even if oil is ending on an “A” wave in Intermediate degree, a net pull back of 50% can take us to the $40 price range.  A $10-$12 correction is peanuts, as that would not force too many oil bulls to reverse their positions.

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