Friday, November 20, 2015

Predictions of Big Oil Rally in 2016 Not Confirmed By Message of Market

'Fundamentals' arguments can lead disappointing investment results for extended periods. Crude oil which broke the ice of cause in June has been trending lower, without interruption, since August 2014 despite broader, bullish DI and CAP oscillations (Review of Crude Oil). The divergence of price and leverage trends, a significant sign of weakness (SOW) that investors must recognize, made June's technical breakdown even more bearish.

A growing minority, regardless of the 'fundamentals', recognizes mark down until reversed; extreme concentration of price and leverage generally anticipate them.  Neither are present today.   A reversal is likely when majority, typically a day late and dollar short, turns extremely bearish.  Headlines of Why oil could rally big in 2016 will be replace by Why oil could decline big in 2018.

Headline: Why oil could rally big in 2016

Despite the astounding surge in the oil supply over the last year, the Bank of England reported that 60 percent of the recent decline in oil prices was due to demand factors.



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