In June when crude oil closed above $138, I featured the chart below, showing that adjusted for inflation crude oil was not only exhibiting classic bubble behavior, but that it dwarfed previous oil spikes:
The next day as Texas tea ramped up the most dollars in its trading history, I mentioned that even if we looked at crude oil priced in gold, it was expensive:
…which would imply that if this ratio has any significance, a top in oil is close at hand.
It took a few weeks until the top was put in oil at ~$148 in mid July. But as of now it is down approximately 27%
A quick glance at the chart shows previous resistance, now support, at the round number $100. When or if, oil continues to fall, it will provide relief for the economy. As for whether the spike up was manipulation, normal market dynamics, a bubble, etc. I’ll leave you to explore that for yourself.
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