If a deleveraging like 1999 is happening, perhaps we will see 1999-2008 in oil play out in a similar fashion? Not saying it will or won't happen, but it currently looks like oil is setting up momentum for a future breakout.
I copied the bars pattern from 1999 to 2008. Maybe it's too bullish? Or maybe not bullish enough. I would venture to say that it seems so much worse than 1999, the prediction isn't bullish enough, but I'm not sure.
What do you think?
Good luck and don't forget to hedge your bets :)
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Correction. bars pattern is actually from ~Jan 2001 to 2008
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I'd like to give a BIG thanks to everyone for your feedback! Here's a few similar ideas that inspired this chart that you might also critique or enjoy:
M2 Adjusted Oil:
S&P vs Oil:
S&P vs Gold (suppose gold might breakout similarly to oil)
@TradingView based on paris agreement all energies will limit like oil and gas and this causes shortage in energy so logically their prices will go to the moon, i guess 400$ per barrel is nothing it goes much much higher this causes also mega inflation. other side currencies very likely crash hard and maybe cryptocurrency do skyrocket
fringe_chartist
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@arviiine, it's a good point, just look at propane prices! Through the roof. With all of these regional shortages going on, suddenly commodities like oil are more of a necessity than ever, much more than fiat currency.
arvine11
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@arviiine gold also moves with oil to the top,, in the covid crash powerful governments bought super cheap oil and in future they will sell it super high, i guess 2020 all countries bought oil in -0$ for a while
@nuggetrouble, I'd be interested to hear your take. The general technical idea here is that, unless there is a reduction of the money supply, money will follow scarce things. We are only 2 years into a recent expansion of the money supply and commodities seem to be lagging in general as is normal with any expansion, and seems to be severely underpriced versus assets. Oil seems mispriced by a factor of 2-4 versus the S&P. Supply has not increased nor does it seem able to increase in order to suppress price. Demand has not been reduced. It also seems pretty cheap historically if you like sideways charts and adjust for M2. People are HOPING it will go down because it's the only thing they can do. So I think this chart is an illustration of the realization that oil will be expensive. There is no alternative. That's all it needs to go up imho.
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