Oil Buy Signals Validated II
Major Advance into 3Q 2018 Projected!
Late-Sept. ’17 – Late-Sept. ’18 = Key.
08/30/17 INSIIDE Track:
Outlook 2017-2018
08-30-17 – Even though I emphatically caution against trading various correlations, I do not ignore their existence or deny their importance. That applies to inter-market correlations (e.g, ‘if interest rates do this, then equities should do that’) and to specific fundamental/market correlations (e.g. Middle East turmoil triggers oil price increases).
One of the more intriguing aspects of cycle analysis is when certain markets, that often hold to general correlations, provide advance clues to corresponding fundamental events. It is another form of ’casting their shadows before’ with market cycles pinpointing when corresponding fundamental events are more likely. Such could be the case in Sept./Oct. 2017. Before elaborating on those expectations, a couple ground rules should be re-stated:
1 – It is primarily during the accelerated market moves that these correlations apply. As a result, the Major cycle highs and lows rarely coincide with the time when related fundamental events occur.
Instead, the confirming fundamental events usually occur during the ‘3’ wave advance (or contrasting ‘C’ wave decline) – when a market is accelerating into an unmistakable trend. That is expressed in the oft-quoted Axiom of Market Correlation…
For the past 2 – 3 years, the overall outlook for Crude was to set a Major, multi-year bottom in early-2016 and then undergo a 1 – 2 year bottoming process until a secondary low was/is expected – in 2Q/3Q 2017. As repeated constantly since early-2016, longer-term cycles would not begin to turn bullish until Sept./Oct. 2017 – the same time that Middle East cycles collide.
The energy complex has adhered to this outlook and Crude is setting the stage for a more sustained advance…
The July 29, 2017 Weekly Re-Lay synopsized this action:
That provided another opportunity for them to turn their weekly trends up, which they have now done. While that has additional bullish implications for the coming 1–3 months, it also pinpoints the likely time (next 1–2 weeks) for an initial high.
The weekly trend pattern in Crude corroborates that – with a spike to ~51.80/CLV possible first. This reinforces what is expected, from Sept. ’17 on.
Consistent with longer-term geopolitical cycles, Sept. 2017 is expected to usher in a tumultuous time in the Middle East, potentially focused on Israel. That has been discussed for two decades.
Similar to the Jewish Year of 5761 (Sept. 2000–Sept. 2001) – a complete 17-Year Cycle ago – the Jewish Year of 5778 (Sept. 20/21, 2017–Sept. 2018) has been expected to escalate tensions surrounding the Middle East.””
Oil markets are confirming major (1Q 2016) & secondary (mid-2017) lows and increasing the potential to take off higher in Sept./Oct. 2017. That is projected to spur an overall advance into Sept./Oct. 2018 – the culmination of this impending Middle East transition cycle.
Heating Oil & Unleaded Gas have powerfully confirmed their July 2017 buy signals and are projected to rally into January 2018 – when multiple cycles converge. Specific price targets – for the 3 – 6 month outlook – are already taking form and are likely to be reached by/in 1Q 2018. An initial peak in 1Q 2018 would reinforce the outlook for progressively higher highs into Sept./Oct. 2018.
See Weekly Re-Lay & INSIIDE Track for additional analysis and/or trading strategies.