85 replies to this topic

[SilentOne]

hi BW,

I think the USD is key here and could begin a strong rally. I have a potential 80 week Hurst low here this week. The last one was March 2008. The cycle would have run about 64 weeks versus what seems to be an average 68 week cycle. Note this cycle is shorther than the Hurst nominal 80 week cycle and if bullish, should be even shorter. So if the USD has bottomed, I am not bullish crude, gold or commodities here. I leaning into the USD in investment accounts and some bonds for the first time in a long time.

http://www.traders-t...howtopic=106580

cheers,

john

[SilentOne]

Crude has more upside potential, but only later this year. I expect it to be one of the very last things to top out in the commodities sector before the whole thing goes down. Oil bulls want to see crude make a 22/23 week low here in July and then hold that low for a rally into the fall. No targets right now, but we could get a simple ABC pattern, with A up complete and now in B down. I took my eye off this thing in April and missed the 11 week low. It came early. Should have stuck with a core position though knowing that the larger cycles had bottomed. Live and learn. cheers, john

[SilentOne]

The 22/23 week cycle is coming in here on cue. Is this phasing correct and will cycles for crude behave themselves? First buy below $60, likely $58. A 14 day cycle low is due late this week and may coincide with the expected 22/23 week low. To be bullish though, crude will have to make a bottom here and hold it this summer and then rally into the fall. If such a low fails to materialize, then crude enters a bearish mode into the longer term cycle lows due in late 2010 or 2011. This seems like a long way off, so I am not expecting a really bearish trend for crude to develop until next year. I know one thing. No one wants to buy crude oil right now. Sentiment is very bearish. It only took a few trading days to finally get to this situation. I should add that one should expect crude to continue to outperform energy stocks on any coming rally. cheers, john

[klono]

John: Which ETF would you buy? For example, USO, USL, etc. k

[SilentOne]

klono, I will probably take a position in USL first. USL is on a 12 month futures rollover which should minimize the frictional costs of an oil ETF. cheers, john

[SilentOne]

Taking an initial position in USL today here near $33. A 14 day low is due here or early next week. Crude may not get going until the next 14 day cycle low is in. A 50% retracement to 32 may still be the better buy and will add more there. I should mention that the larger daily cycles (56 day and 128, or 11 and 22/23 week cycles) have been very right translated here. So crude has a bullish posture until proven otherwise. cheers, john

Edited by SilentOne, 10 July 2009 - 09:30 AM.

[denmo83]

Taking an initial position in USL today here near $33. A 14 day low is due here or early next week. Crude may not get going until the next 14 day cycle low is in. A 50% retracement to 32 may still be the better buy and will add more there.

I should mention that the larger daily cycles (56 day and 128, or 11 and 22/23 week cycles) have been very right translated here. So crude has a bullish posture until proven otherwise.

cheers,

john

Hey John,

Nice analysis.

I opened positions in USO and DIG midday Friday. Glad to be on the same page with you. Do you have any price/target projections for USL? Time frame?? Thanks!

[Echo]

Hey John, Welcome back. I don't do too much work with oil, but using the cycle lengths you have found, USL is giving a 10wk target low of 30.00 +/- 1.0. If Z is right that the USD is itching to take off, those lows could just be met. Just food for thought. Echo

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[denmo83]

Hi John... My 1st post disappeared. I bought USO and DIG Friday. Looking for a bounce here off USO trendline. Your work seems to imply more than a bounce. Do you mind me asking duration? Thanks for sharing your chart/cycle work.

[SilentOne]

hi denmo & Echo,

I've only taken a partial position in USL, but will add more at the next 14 day cycle low. The 14 day cycle has been very distinct so I am going with that rather than the bearish FLD target. I count that the current 14 day cycle should have bottomed on Friday, or possibly Monday.

But it is the longer cycles that are of interest here. The last phasing I posted early this year was correct IMO. That had the 44/45 and 88/90 week cycles nest of lows mid-Feb. Now while the 44/45 week cycle will be topping out soon, we still have the start of a new 22/23 week cycle coming in here and the 88/90 week cycle pointing up. So crude can start a rally anytime and last for a few weeks, but possibly it could rally until the 88/90 week cycle tops out late this year. For now there is no way to forecast this on my part. I do feel that crude will be about the last thing to top out before we enter a bearish cycle in commodities and equities next year. Crude oil for exampe will be heading into a 4.5 year Hurst cycle low late next year as the next 44/45 week and the current 88/90 week cycles find a bottom.



cheers,

john

P.S. denmo, it's been a while. Hope you are well.

Edited by SilentOne, 12 July 2009 - 01:45 PM.