Monthly Archives: April 2008

Crude Oil Blow-off Setting Up Major Bear Market Decline Ahead

 The BAM report has been short crude oil for months now and although the market tracked the model off the first sell signal (with a quick 10 dollar plunge to the downside during January) the market has since come unhinged from my forecast in what looks to me like a classic “last gasp” blow-off leg. 

There is nothing on a chart basis that would prevent Crude Oil from blowing-off into the 140 level short-term. 

Based on the current model, I’d say the odds are HUGE that we’re at a bubble TOP in crude oil that will rival the housing bubble TOP of the summer of 2005 and if I’m correct on that call a decline to the 50 dollar level looks conservative and we could actually be headed to the 26-36 dollar level within the next 18-24 months!* 

*Based on my “rule of four” whereby post-bubble prices collapse four times faster than they inflate. 

-JGS 

Full report coming soon

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