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Crude Oil Correction Arrives on Schedule

BOB HOYE, INSTITUTIONAL ADVISORS
January 27th, 2012
EMAIL:: bobhoye@institutionaladvisors.com
CHARTWORKS WEBSITE:: www.institutionaladvisors.com

Strong fourth calendar quarters in crude oil, as seen ten times since 1986, are followed by even higher highs in the following year, but only after a correction in January – February.

Following last year’s positive fourth calendar quarter oil has established a customary high in the early days of January. As stated in earlier reports, look for support at the 50-day Bollinger Band (currently 94.70) ideally with an RSI(14) reading in the mid 30’s. Another key support following strong Q4’s is the 4% moving average envelope at 94.40 (4% below the 34-day moving average of lows).

It was influential at the January – February lows of 2011, 2010, 2008, 2000, 1996 and 1987; close in 2004 & 1989 and ineffective in 1990 when the eventual low was generated in June.

Each year that saw a positive Q4 was followed by a minimum advance of 10% in the next year and a median advance of 39%. From the corrective low, the minimum advance was 26% with a median rally of 50%.



BOB HOYE, INSTITUTIONAL ADVISORS
January 27th, 2012
EMAIL:: bobhoye@institutionaladvisors.com
CHARTWORKS WEBSITE:: www.institutionaladvisors.com


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