Talking heads call for $30.00 oil – Terry Kinder

by Terry Kinder, The Daily Coin With the blow-dried bobble-heads and their guests over at CNBC calling for $30.00 – $35.00 per barrel oil, and others predicting $20.00, or even $10.00 oil, it’s high time for a more rational look at the price of oil. The oil price, for the last decade or so, has been in a pattern where it alternates between periods where the overall trend is up, and others where it is down. Let’s see if you can spot the trend in the chart below. Trend Spotting Oil-Spot-the-Trend TK (click image to enlarge) The chart above has a couple of important elements: 1) Support levels formed by what is called a Pitchfan. What is a Pitchfan? It is a combination pitchfork and Gann Fan. The Pitchfan is a pretty amazing chart tool as you’ll see in a moment; 2) Trend-Based Fibonacci Time. This tool allows you to plot future time periods where important price trend changes will likely occur. Taking a look at our first chart, you’ll see three areas labeled support. This area of support has held up for over a decade and, as this is being written, is still offering good support to the oil price. In fact, soon after I started using the Pitchfan extensively and noticed the price support area, I posted a chart at Trading View questioning if the oil price was near a bottom. Not long after that, the oil price bounced higher. You may also notice areas labeled either down or up on the chart. These are based on the beginning of each Fibonacci time period. For example, at the bottom of the chart you will see 0, 0.382, 0.618. 1, etc. These are our trend-based Fibonacci time periods. The first period labeled down is estimated. In fact, to be safe, I picked two different points – one about two years in length and the other about 4 years. Some might question this first estimated period since it includes the spike high price, but that isn’t an important consideration for the purposes of this analysis. The only thing being looked at here is the price at the start of the period and the end. Moving on, the next period (pink shaded) was a period where the price moved up. The period after (greenish shaded) saw the price move down. So, which way do you think the price will move in the current period? Given that the oil price just bounced off support a few weeks ago, I believe the price will move higher. Despite the “trustworthy” folks over at CNBC calling for lower oil prices I’m projecting a higher oil price when the current Fibonacci time period ends on July 30, 2018. How high? Let’s take a look. Oil-Target-Prices TK (click image to enlarge) $289.00 oil? In the above chart I have estimated four potential price moves for the current period: 1) $124.47; 2) $140.10; 3) $169.23; 4) $289.31 If you follow over to the left of where each arrow points to, you will see that each of these levels was a pivot price high for oil in the past. Price Target Probabilities My thinking is that the oil price will rebound higher and move up to one of these levels listed above. You may be wondering how likely is it that each of the price targets will be met. Here are some estimated percent probabilities: 1) $124.47 – 75%; 2) $140.10 – 60%; 3) $169.23 – 50%; 4) $289.31 – 25% Conclusion Listening to the talking heads on tout TV is a quick way to be separated from your money. It’s one of the reasons that I prefer the technical analysis of price over what is called fundamental analysis. Price encapsulates the knowledge of thousands, even millions of people about any given commodity, whether that be oil, corn, gold or orange juice. Unless the oil price drops below $47.00 per barrel and holds there for several days, or longer, I’m expecting oil to continue moving higher over the short-to-medium-term. By July 30, 2018, we should be seeing oil prices that are 2 times to 5.5 times higher than the current price. Terry’s Bio can be found HERE>>>

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