Elliott Wave 5.0 "Reboot"

Sunday, March 3, 2013

Crude Oil, Are The Crude Oil Bears In A Trap?

This is the April crude oil contract and it sure looks like a crash to me.
The angle is steep enough to fit the bill and last week oil created a long spike as well. All the bears will have protective buy stops in place, so oil could see a dramatic rise as all those bears instantly turn into bulls. Since the oil crash looks corrective then oil can travel to new highs in the next few months and oil should have no problem hitting $100 per barrel one more time. I have mentioned many times that oil may even see $115 per barrel and this may happen closer to the summer holiday and fall hurricane seasons. 

Right now the gold/oil ratio is about 17:1. The higher the ratio the cheaper oil is to gold. When oil gets to the extreme side then anything 10:1 would be extreme.
The economists that are forecasting $5000 gold are also telling us that we are going to get $500 per barrel oil, even though they do not say that in print. It is silly to expect gold to go up without oil maintaining its ratio range.