CRB. Gold, Oil, and the dollar....and the Dubya factor.

Discussion in 'Commodity Futures' started by ARogueTrader, Jan 30, 2004.

  1. Moving closer to the election, the shift away from Iraq to the economy begins to take center stage.

    The election will once again come down to the economy, as at this point most people's feelings about the Iraq war won't change that much.

    What would benefit GW the most would be lower oil prices, and a rising stock market.

    Can GW pull some strings with his OPEC buddies? Will he sell our strategic oil reserves back into the open market to reduce the price of crude? Will the dollar be orchestrated higher to entice foreign investors back into our markets for a rise in equity prices?

    Take a look at the CRB. We are at some serious resistance levels, and the W formation (or Dubya formation) suggests a time for a correction. While I do expect higher prices in the future, now would be a classic time for a correction in the CRB if the oil prices decline back to the mid 20 levels, which I think would benefit Bush tremendously.

    Also note on the short term CRB chart that we have recently had a bearish crossover on the MACD, which indicates lower prices ahead of us.

    In addition, we are at a key support level just below 265, which if broken suggests a top of sorts has been put in for a while, and a correction back to support levels as low as 225 may be in store.

    One interesting anomaly is the rise in CRB while interest rates also declined, as increase in CRB is typically inflationary and would pressure rates higher.

    The first chart is the daily, the second chart is a monthly.


  2. Oil Monthly Chart:

  3. On your first chart I notice two MACD bearish crossovers followed in the not too distant future by further increases in price.

    I'd be curious to know how the administration might "orchestrate the dollar higher," considering our increasing deficit.

    Nice post,
  4. Interesting point about the bearish crossover.

    I think they work best when the market has had a nice run up, and allows for profit taking/corrections.

    Those crossovers that did not decline came on the heels of a small correction and runnup, so I did not point to them.

    In this case, since the CRB met serious monthly overhead resistance, I think the crossover, as well as the formation is bearish.

    How could the administration orchestrate the dollar higher?

    By having the banks intervene to support the dollar.

    Remember, the banks need to make money, they are always ahead of the game, and a correction upside move in the dollar makes sense through the election.

  5. Last time I checked, large deficits mean higher rates, and higher rates mean a firmer dollar.

    Nice post Rogue.

  6. Suggests that a diagonal triangle ended at 35.25 in March Crude. The target will be 26.20 which is back to the lows of 2003.

    Initial chart points that might be supportive on the way down are 30.90 and 28.70
  7. One word: Japan :eek:
  8. taodr


    Interesting post. I have thought about this a lot. Last September I figured Bush needs to get oil down into at least the low 20's by election. I believe it needs to go to $18 to be on the safe side for Georgie. I figured he needs at least six months for lower oil prices to spread through the economy. So oil should start coming down towards end of February.

    In this regard there was a story on the newswires this week that Iraq oil would flow to Turkey soon as lines are almost fixed or as it said "useable' This is a total croc of lies. Iraq was exporting millions of barrels of oil illegally before the war. What happened to that oil flow ? Obviously it is being contained until Bush says "Let it flow boys "

    Also on the newswires yesterday. American commander says they will Have Bin Laden this year, obviously all planned. Only I think if they catch Bin Laden before election Bush WILL NOT GET RE-ELECTED.