USOIL may have hit bottom

12 Feb 2016

I don't catch falling knives, but I know the sound when they hit the floor, and can watch them do it. Note the time distance between them similar. Note the strength of this bottom indicator. RSI rising for a while now while price did still descend. Every final sell needs a capitulation in sell volume, and we have certainly had that, wow, I say again wow, look at that generation red candle , actually two of them. This double bottom may be the real deal. But in this crazy market who really knows. Enough for me to go long uwti, and nothing else. Might spike stocks short term, but if OIL does rise sharply, with a world bank desperate for inflation, doing everything they can to create it, and finding nothing, for years, be careful what you ask for you might just finally get it. If Opec really does cut production, that would do it. And incidentally, punish frackers yet again. How? When the hyper inflation kicks in, and it could quicker than anyone thinks. Maybe the second tier of their plan, I am guessing totally here. it will bring down the US economy, and lower demand, and they will then have to shut the wells down, and a lot of them. But that theory has holes for sure. Just mentioning. So gold has bottomed ahead of oil about 90 days, which is exactly what happened in 2009. Dollar strength needs to fade also for this to be totally convincing, and decouple from oil, go inverse once again. Minors are getting happy again, hope on the horizon for commodities bounce too. BUT THAT WILL CREATE INFLATION AND MAYBE HYPER INFLATION, yellen will have her rate hikes for sure, and banks may prosper short term, but the consumer didn't go crazy and spend with these low oil prices, a rise in oil will bring all economies to a hault, when everything made with it, shipped by it, and used for power will cost more, a lot more. This recent gold spike is the canary, because when inflation finally hits the headlines, and we have it now, it is just being muzzled and hidden, watch out folks, this could be devastating. The final unintended consequence of QE, the cardinal sin for a supply demand based economy. They knew it, but had no choice, I guess. My guess is they have been planning for this... oil spike, hyper inflation, dollar crash, currency crashes, credit ratings crash, bond crash, illiquidity everywhere, debt crash, banks crash, IMF takes over, remove cash from markets, create digital bank, digital currencies, credit swaps galore to install order, etc, etc. you know, some variation of that, but that';s the ballpark we are playing in already, we just don't know it yet. Always, just IMO. be careful out there.