05/2013 Crude Oil Futures & Macro Market Considerations

Monthly, Weekly, and Daily Chart of Crude Oil

CL#  Monthly  #1 41406.139CL#  Weekly  #1 41406.1395CL#  Daily  #1 41406.1402

Crude Oil has re-balanced following the crash in 2008. Since then, Crude Oil has resumed the long-term uptrend and slowly pushed value higher. In the last few years (2011-ish) volatility has begun to contract. 2012 was an inside range year. This year, volatility expansion is expected.

On the Weekly Chart, sellers tested the composite VPOC earlier in the year and was met with rejection. On the Daily chart, sellers tested the VWAP/2012 VPOC and was met with rejection. All time-frames are bullish. An upside breakout is expected given the strong rejection of the year’s VWAP/VPOC. However, this play is aggressive. It’s fine to wait for initial thrust and getting in on the first pullback.

What the hell? Why is everything about to experiencing massive movements?

I’ve posted on my blog about the imminent US massive bull cycle, Euro, Aussie, and now Crude Oil. I’m expecting massive movements in the remainder of the year in the majority of the financial markets. Except for US Equities, the Euro+Australian Dollar+Crude Oil have all been undergoing volatility contraction in the last few years.

With the expectations of a massive bull cycle, major re-pricings in many financial markets are expected. The financial markets are all linked together. All the individual markets are like pieces of a puzzle, with the puzzle being the conglomerate financial markets.

For example, at the beginning of a massive bull cycle, US Equities typically rally first. Then the Dollar begins to rally significantly as well. When the Dollar rallies, it puts pressure on other currencies. The Australian is currently beginning to take a nosedive lower. On the other hand, the Euro is notorious for being inversely correlated with the Dollar. However, I expect both the US Dollar and the Euro to undergo massive bull markets for the next decade. Both the US and European zone are the strongest economic zones in the world. Again, the beginning of massive bull cycles will have massive appreciation in value of strong currencies. Because the Dollar and Euro will rally in tandem, other world currencies will take historical hits lower. Consequentially, the Yen is already undergoing a very rapid devaluation. And unlike other world currencies, the Japanese economy (a majorly export-dominated nation) thrives on a weak Yen.

If the massive bull cycle manifests, the Euro will assert itself as a very dominate currency. US & European economies will be crushing the upside. And oil prices will rally substantially.

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