CRUDE OIL

Weekly Timing Arrays for Nymex Futures (see below) suggest that the week of August 5th as a target for Directional Change and High Volatility, and the week of September 23rd for Panic.

The potential for significant turning points during the weeks of August 5th and September 23rd (signalled by the vertical lines on the chart below) is also suggested by “Bifurcation”.

On the Monthly Timing Arrays note that the month of August and December are both indicated for Directional Change. Since the week of August 5th within the month is also indicated for Directional Change, we will pay special attention to movements of oil that week as a possible key change in direction.

On the monthly as well as the weekly timeframe Bifurcation reinforces the signals we get from the Timing Arrays. On the chart of oil below the Bifurcation arc has its end point in time the month of December 1996. From the Timing Arrays you recall that December was indicated for Directional Change and High Volatility. A very serious change in direction should at least begin the month of December.

Finally we preceed to the Quarterly Timing Arrays.

The significance of this timing array cannot be overemphasized. Note Directional Change 3rd Quarter 96, 4th Quarter 96, and 1st Quarter 97. This suggests a series of shifts in direction with perhaps the most significant shift occuring 1st Quarter 97 coinciding with a Panic signal for that quarter.

What does it all mean? If you believe oil is going down longterm, your conviction will be sorely tested no later that 1st quarter 97. We are forecasting sharply higher oil prices over the next few years based on signals we get from the Reversal System. along with the Timing Models you’ve just seen. The Fed has come out publicly stating that there is no need to raise interest rates “because oil is under control”. Is this Fed setting expectations for oil prices unreasonably low so the markets will do its dirty work? BONDHOLDERS BEWARE: False expectations for cheaper oil could cause a sharp increase in interest rates when oil takes off to new highs.