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THE
MAGNIFICENT SEVEN Background:
Big Oil Sarsaparilla – OPEC, Saudi Arabia, Iraq, derivatives, 484-week cycle, 11-week cycle, 18-week cycle, Nigeria, offshore platforms, EIA, CIA, Hubbert’s Peak, North Sea, Caspian Sea, South China Sea, Gulfs of Everything, Russian deep drilling, rumors, lies, Shell, BP, Exxon, Oxy, Petro-Dinars and a Rabbit beating a Drum. Can the Hydrocarbon Man afford to be without hydrocarbons (stay-tuned to this century as we enter the final chapter)? Six billion+ people on the planet use (really need?) oil: Charts 1 - 6 show the Magnificent Longwave (Weekly) Cycles as they look riding thru AMEX Big Oil and into the future. The main “horses” are 11, 18, 72, 110, 182, 340 and 484-week cycles. Chart 1 shows the match of these seven cycles versus the actual closing weekly prices (detrended) for the XOI (Weekly) Index from 1983-1989. There was some kind of shell game in 1974 involving “find the oil in the tanker if you can find the tanker (off Jacksonville, FL)?” Chart 2 shows an interesting development in the 11-week and 18-week cycles. These cycles are currently the dominant cycles in the Amex XOI Index but more importantly the sum of these two cycles may represent a key trading pattern that has been going on for many years. Chart 3 shows a comparison of the XOI (detrended) versus the sum of the 11 and 18 week cycles from 1997 thru 1999. It looks like a trading pattern exists from April thru October of each year where these dates correspond to possible entry/exit/inflection points in the sum of the 11-week and 18-week cycles. Chart 4 shows a comparison of the XOI (detrended) from 2000 thru April 2005 versus the sum of the 11-week and 18-week cycles. The possibility of using two relatively close frequencies (cycles) to trade (and manipulate) a commodity appears from the early-mid 1990s with the increasing use of derivatives. Actually, this is quite clever. One can create a “beating phenomenon between two close frequencies” which has the effect of alternatively “stretching or collapsing” the waveform. At some point it looks like the price swings disappear (cycles out of phase at tops or bottoms) and at other times they add together for rather dramatic price swings up and down. If one can control the production source of the commodity (OPEC for Black Oil) perhaps (only a speculation) derivatives (who would that be - FMOC?) can be effectively used to manipulate the amplitude and phasing of two such cycles. It almost looks like “somebody” has been having fun coming and going in early April thru late October from 1997 – how about that Betty Ann? Chart 5 shows the predicted weekly XOI (detrended) from April 2005 thru 2006 including the sum of the 11-week and 18-week cycles. It shows there is another “spike” in the XOI in August 2005 and another one around April 2006. The move in XOI Index in March/April 2006 corresponds to predicted planned attack on DJIA components in this same timeframe (March-May 2006) (see Wal-Mart, Citigroup, etc). The Strange Stagecoach (2009): Chart 6 shows the AMEX Oil Index (XOI) predicted from 2007-2012. There is a planned increase from roughly March 2006 thru Sept 2009. A nice rally in the Index may occur from June 2008 thru Sept 2009. Just when one would think this thingy about Peak Oil is going thru the roof (Sept 2009), the Amex Oil Index strangely breaks into a “sideways trading pattern” giving us a baseline for the coming Mega-Mayan Bear Rally. Should you buy a Hybrid Car in 2012? Interesting how 2008 as a date enters into equities in terms of coming significant moves. In the coming Olympics (2008) in China, maybe they will have a “Black Oil Coin” depicting a Dragon ready to devour the whole world’s gasoline supply. On the back of the coin we could have a Federal Note with Solar Panels flying South for the coming K-Winter. My! What big SUVs you have for a country with declining oil, Ms Riding Hood! The ^^^ Stagecoach (2006): The world’s population is estimated around 6.42 billion and could be as high as 6.59 billion (April 2005). The world’s population grows about 6.2 million (plus or minus 0.4 million) per month and if one assumes the higher number for the population then perhaps around June 6, 2006 (06.06.06) the world’s population will reach 6.666 billion people needing Black Oil!?
DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, the author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments. CONTACT
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