Wednesday, August 24, 2011

Amex Oil Index (XOI) Cycle Chart - Experimental

Zero-Sum, here it is as we discussed.




6 comments:

Anonymous said...

I didn't actually think you'd do it. Thanks a lot, I'm grateful. Judging from the chart provided, in conjunction with Martin Armstrong's predictions, I think there will be a re-test of the March lows (deflationary), followed by the last gasp of insanity (inflationary) into 2015.75. The peak in market confidence is said to be 2015.75, but I find it curious how oil is not at it's peak by than. I conclude that this next round of sky-high oil prices will be met with already developed green alternative, unlike the most recent oil rally (2008). What will be this alternative? Find it and you will be well off. China will be crowned the new capital concentration of the world, because oil manages to decouple, after the 2015.75 date. The date which is said to be the death kneel of America's status as economic superpower. There is so much to be said in this chart, I am sure time will reveal if our convictions are accurate or not.

Thanks again, I appreciate it.
-Zero_Sum

Anonymous said...

If the peak in the asset mania is supposed to be 2015.75, than to have oil not participate implies a new green energy bubble. The substitute energy source, now becomes the main centre of attention. The capital moves away from oil stocks to green energy stocks. There will be a undervaluation of oil stocks in comparison to green energy stocks. Even though consumption demand is higher in oil, than in green energy, the price action will not reflect it. This is a trait of a bubblicious top being formed in green energy stocks. 2014 June is when the green energy stocks will become mainstream, is what I am getting from this chart. This chart produces more questions than answers.

Zero_Sum

Anonymous said...

I disagree with your long-term chart, because I don't think we will touch the 1994 rally starting point. Because this means the politicians will not enslave the country with debt (stimulus) even more so on a grander scale than before. Your software is optimistic about the political system, I am not. The next stimulus package will be a Dr. Evil size. This package will prevent a test of the 1994 point, in return for forfeiting the economic crown.

With that said, I do not want your software to be right. If so, this means billions of people around the world will be ruined. Drop by Daneric's, we'd love to hear your commentary on the markets or chart postings.

Zero_Sum

Paolo said...

Thanks for your thoughts, Zero_Sum. At the risk of unfairly denigrating my own work -- I think the cycle models are much like hurricane track models, subject to change from external factors which are unknown and therefore appear in the structural model equations as 'error.'

When evaluating the models, as one moves into the future, the timing error of max-min points increases less than the error in price magnitude.

That said, I am very happy with how the DJIA short term predictions turned out. In the chart I posted on May 24, it looked like the model was "broken" but it seems to have played out quite well.

Paolo said...

One more thing - I know commodities have a major cycle with a period of about 31 years. Because this particular time series began in 1984, its model cannot process cycles > 15 years or so.

Anonymous said...

I gotta admit, a part of my disagreement is formed with denial. Which is not very unprofessional for a investor. Let's hope we avoid this hurricane, and just have several small windstorms instead. Don't think you would be criticizing your own work by stating it is prone to error. It's a good mind-set to have. To always account for the what-ifs.

Yes, the DJIA short turned out to be quite spot-on. I hope more people visit your blog, it does not get the recognition it deserves. I don't think Daneric would mind if you promoted your website once in a while, some regulars do it.

Have a nice day, Paolo.
-Zero_Sum