Crude to $150, Then Major Correction?
Source: Moby Waller, Seeking Alpha (5/22/08)
As everyone knows, crude oil prices have been rocketing higher. It seems inevitable to me at this point that we will hit $150/barrel on the futures. Often when everybody guesses and discusses that a stock or index will hit a key round-number level, it becomes a self-fulfilling prophecy in a way.
This market has been on a massive upswing since bottoming in late-2001, and appears to have gone parabolic since late-2006. Parabolic uptrends are destined to correct sharply, in my experience, because the froth and speculative nature of such large moves inevitable is taken out.
I anticipate that a move above the Top BigTrends Acceleration Band to $150 is likely to occur, which may mark a significant top in crude oil prices, and I would then expect a pullback to the key $100 level (which besides being a huge psychological round number, is also where the Middle Acceleration Band is currently located).
To me a logical time this correction to occur would be as we close in on the Beijing Olympics, which begin in early-August, or shortly after the Games are done...