Remember the LORD for it is he who gives you the ability to produce wealth and so confirms his covenant... Deut. 8:18

Friday, July 10, 2009


For you "trend watchers" out there: Crude oil is looking bearish these days...
After suffering one of its greatest collapses of all time, crude oil became super-cheap relative to gold late last year. Crude rallied over 100% after that.
But as we noted three weeks ago, oil is no longer a bargain compared to gold. The "easy, early" money has already been made going long oil. Now, the money is being made on the short side.
Oil is down 12% in the past month. And as you can see from today's chart, oil just sliced through its bullish trendline, which has been in force since March. That's the bearish "technical side" of the market...

On the fundamental side, you have a weak economy using less gasoline. Worldwide usage is suffering its worst decline in nearly 30 years. Above-ground supplies of fuel are robust. Given the supply/demand picture and the bearish trendline violation, crude could easily make its way back down to $50 per barrel (Brian Hunt's Market Notes).

No comments: