What’s ahead for crude oil traders? How do things bode for our economy? Here are some speculations.
The following INO.com video discusses the behavior of the crude oil market over the past year. There’s been a lot of volatility over the past 12 months, but if you’re a trader, you’re probably more interested in what INO.com’s resident expert, Adam Hewison, has to say about the trends.
Check this link or the image below to watch the video:
According to Adam, the charts for crude oil are pointing to an uptrend, which are in conflict with the seasonal behavior of crude oil prices. At this time of the year, the typical price movement is downward, but prices right now look like they will buck this trend.
So if there is seasonality to crude oil price movements but the market wants to do the opposite, then this is something we should be paying attention to. The market has been hovering around $75 a barrel but appears to want to break through that. In the video, Adam analyzes the crude oil chart using INO.com’s MarketClub tool. He then uses the Fibonacci retracement feature to analyze the chart details further. He also applies the “Trade Triangle” indicators against the chart to come up with some conclusions:
There is a potential here for crude oil price increases during the winter season. This would be bad news for the U.S. and the world economy if the upward trend does materialize, since this will mean that inflationary pressures may start to take over. And everyone knows just how inflation can cripple our economy.
Crude Oil Market Prices and Possible Inflation
What does this all mean in the larger scheme of things? I’ve been watching the economy lately, and this kind of information makes me even more worried that we’re headed for a double dip recession. First, unemployment numbers appear to be getting worse and second, we’re now seeing the risks of inflation as suggested by the crude oil market chart. Not to mention that economic fundamentals continue to be weighed down by credit crisis concerns, the consequences of the TARP bailout program, and the costs of the heavy stimulus plan that was developed under the Obama administration. We haven’t yet paid the piper so it looks like this economy still has lots of minefields to sidestep for some time.
In the meantime, if you’re a trader, then you know what the charts are saying: prices may go up against seasonality pressures, so it may be time to buy in to make a profit.
(Note: We provide only information and analysis, not actual advice about what you should be doing next. Please form your own conclusions based on the info you find here.)