Research Excerpts

Oil /Energy Prices Hitting Our Upside Targets

Posted on: Sunday, March 4th, 2012

In our February 21st Asbury Alert (access requires subscription) we pointed out that our October 25th 2011 call for a rise to $105.00 per barrel in NYMEX crude oil had been met for an $11.82 per barrel, +13% advance in a little less than 4 months (see chart below).

More recently, in our February 28th Asbury Alert (access requires subscription) entitled Recent Strength In Oil Prices, Energy Sector Bode Well For US Stocks In Q1 2012, we pointed out that our January 6th 1350 upside target for the AMEX Oil Index was met for a 103 point, +8% advance in a little less than 2 months.  During the same period the S&P 500 rose by 98 points or +8%.

Despite all of the chatter in the financial press this past week about an imminent rise to $5.00 per gallon at the pump, our experience has been that financial asset prices often stabilize, or even reverse direction, once initial upside price targets have been met.  No better example of this than two of our energy-related price targets being met within the past two weeks, just as the financial media becomes obsessed on oil prices.  Respectfully, we would say that the horse may already out of the barn.  Remember the old adage “buy the rumor, sell the news”.

We have been keeping a close eye on oil prices for the past 6 months because of their influence upon other key financial asset prices like US equities, and their overall implications for the US economy. Our latest research pertaining to these relationships is available in our Research Center, which can be accessed by subscribers via the big gold button at the upper right corner of this page.