Crude Oil Couldn't Care Less About "Fundamentals"

 Instead, here's historic evidence it adheres to Elliott waves

 

 

If there's one financial market that investors evaluate based on "market fundamentals," it's crude oil.

This Feb. 10 Reuters news item provides an example:

Oil may resume its rally in 2023 as Chinese demand recovers after COVID curbs were scrapped and lack of investment limits growth in supply, OPEC country officials told Reuters, with a growing number seeing a possible return to $100 a barrel.

Of course, whether the price of crude oil rises to $100 this year remains to be seen. The point is to show you a typical forecast based on "fundamentals."

Yet, over the decades, there have been scores of crude oil forecasts based on "fundamentals" which have simply not panned out. Indeed, quite a few times, prices will move in the opposite direction from the consensus of the "fundamentalists."

However, Elliott Wave International has observed that crude oil tends to follow Elliott wave patterns of investor psychology.

Let's look at a historical example. Back in 2008, crude hit an all-time high of almost $150 a barrel. Predictably, the mainstream saw more upside; calls for $200 a barrel were common. But here's a chart from our June 2008 Global Market Perspective with the "5" wave label (indicating an Elliott wave end to oil's rise). The commentary from that issue is below the chart:

The fifth wave has carried to the upper line, which signals that the rally is nearing an end. Oftentimes, prices will "throw over" the upper channel for a brief period.

 

L 'indice FTSE MIB scambia in ribasso

 'indice FTSE MIB scambia  in ribasso intorno a 27.375, in linea con le altre borse europee, mentre gli investitori continuano a confrontarsi con la prospettiva di politiche monetarie durature e restrittive da parte delle banche centrali. I dati sull'inflazione di Spagna e Francia sono risultati più caldi del previsto a 

 

l'indice FTSE MIB in rialzo di oltre l'1,5%

 

l'indice FTSE MIB  in rialzo di oltre l'1,5% lunedi  intorno a quota 27.400, dopo il calo del 2,5% della settimana precedente, sovraperformando i suoi omologhi europei. 

Le azioni europee in calo

 

 

 Le azioni europee hanno ampliato le perdite venerdì pomeriggio, con l'indice STOXX 600 in calo dello 0,7% e il DAX 40 tedesco che ha perso oltre l'1%, dopo che l'indice dei prezzi  degli Stati Uniti,

L'indice FTSE MIB rimbalza e scambia in rialzo

 

 L'indice FTSE MIB è stato scambiato in rialzo intorno a 27.300 ì, dopo quattro sessioni consecutive di perdite, in linea con la maggior parte dei suoi omologhi europei. Il sentimento del mercato è stato favorito da una nuova serie di utili societari positivi, mentre l'attenzione si è concentrata anche sui dati finali

Gold: What "Colossal" Central Bank Buying May Mean

 

"Central banks are so confident that gold prices will continue rising that they are..."

By Elliott Wave International

Central banks have been scooping up gold with a vengeance.

Here's a Jan. 31 Financial Times headline:

'Colossal' central bank buying drives gold demand to decade high

Interestingly, just a few days later on Feb. 3, the precious metal dropped by more than 2%. But setting aside near-term price moves in gold, what you need to know is that government is nearly always the last to act on a financial trend. In other words, when government acts, a financial trend is either nearly or already over.

In the case of gold, consider that central banks were furiously buying it in mid-2011. As you may recall, gold had been strongly rallying. Well, just three months later in September of that year, gold hit a top and fell 46% during the next four years.

Going back in history a little further to around 1999 and 2000, there was the gold selling episode which amusingly came to be known as "Brown's Bottom" -- referring to Britain's Chancellor of the Exchequer at the time, Gordon Brown.

Brown was fervently selling from Britain's gold reserves after gold had been in a multi-year downtrend.

You no doubt know the rest of the story: After Brown's gold selling, the precious metal then entered a multi-year uptrend.

But let's get back to the present, namely, an instructive chart and commentary from our recently published February 2023 Elliott Wave Financial Forecast:

L' indice FTSE MIB in discesa sotto a 27.200

 

L' indice FTSE MIB è sceso intorno a 27.200 mercoledì, registrando la quarta sessione consecutiva di

 perdite, in linea con i suoi omologhi europei. Gli investitori hanno tenuto sotto controllo i dati

ASIA IN ROSSO

 Le borse asiatiche sono state sottoposte a una forte pressione di vendita mercoledì, rispecchiando le perdite registrate nella notte a Wall Street, con gli investitori preoccupati per la salute dell'economia globale mentre le banche centrali si muovono aggressivamente per contenere l'inflazione. 

L'i ndice FTSE MIB chiude in ribasso dello 0,6% a 27.600

L'i ndice FTSE MIB ha annullato i guadagni iniziali per chiudere in ribasso dello 0,6% a 27.600 lunedì, sotto la pressione dei continui timori di un aumento dei tassi di interesse nell'Eurozona, mentre gli 

FUTURES CONTRACT - FORWARD CONTRACTS

 

 • A futures contract is a legal agreement to buy or sell a

particular commodity or asset at a predetermined price at a

specified time in the future.

• Futures contracts are standardized for quality and quantity to

facilitate trading on a futures exchange.