Wednesday, June 5, 2013

WTIC West Texas Crude Oil Weekly Chart Sideways Symmetrical Triangle

We are at an epic inflection point in global markets. Oil has no more room to run inside the sideways symmetrical triangle. A decision is required.  The vertical side of the triangle is from 80 to 100 handles so the ramifications may be historic.  If oil breaks up through 95-96, the direction is higher. This scenario would be in concert with Treasury yields truly moving higher and a return of inflation on the way. The upside would also be reflective of a Middle East falling apart into regional wars disrupting oil production and supply lines. If oil breaks down under 89-90, the oil bears receive the nod. This scenario would verify the ongoing disinflation and project a drop into deflation and a stagnant global economy for many months, perhaps a year or two or more, a Great Depression type outcome.

The upside breakout would target 150 and higher. The downside break down would target 50 and lower. Keystone continues to lean towards the disinflation and deflation camp moving forward and does not expect higher Treasury yields and inflation, even hyperinflation, to hit for many months if not a year or three. Traders may be surprised at the flat nature of yields and currencies over the next couple years. The downside is also favored by the glut in oil ongoing. Any available container is used to store oil. Keystone even took the rain water barrels and filled them with oil since there is no place to put the stuff, it is coming out our ears. This glut reflects an over supply and under demand. OPEC met last week and did not lower production quota's so this only keeps the spigots on full steam.  OPEC does not want to lower production since they know the North American production will simply fill the void and they will not accomplish a higher oil price while at the same time losing market share. The Saudi's and others are obviously worried about their future. North America is a sea of oil and natty gas. Looks like over the next few weeks the direction will be obvious. What say you, up or down? This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.


  1. Fundamentals certainly suggest lower prices. "We don’t know what that limit is but when it is reached it will trigger a slide in crude prices as producers discount their oil to get it into the market. With limited pipeline takeaway capacity from Houston, and a near-total ban on exports, these barrels have to be refined somehow."

  2. price break above 95 today. All other agriculture commodity is on a tear.


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