Oil Market and DOW JONES 4-8-2011

WTIC oil currently hit another 52week high to 111.0 usd. Last time, the big 3 raised pump prices when it was still in 106usd. So what do we expect again next week? Sadly, Higher gas prices again.... Even though our USDPHP currency dropped to 43.09, the 5.0 usd gain in 2 weeks is around 5% increase in World Market.

We were already pawned last 2007 with 65per liter gas, Is WTIC likely to get 31yr high as what Silver did?? what’s next to us if WTIC went to 175(25% more from 2007 high, 65% more from our current price, so 80pesos per liter.. ouch)??

To have an overview forecast on what can we expect on Oil if the uptrend continues, I have drawn different color lines in the graph to show 1 year timeframe for each color, At this uptrend phase, we expect Oil at Mid 2012 to be AT LEAST 130USD per barrel.

So in terms of computation as of today, we are again waiting to be shredded by high flying inflation, an estimate of 5% increase in world market, and 1% decrease in currency cost, thats around 4% increase with estimate of 1.5-2.00 pesos increase again...

Anyway, as inflation rises, stock market rises, BSP rate hikes, Interest rate hikes, Property sales gets pressured. And when inflation gets to its “parabolic” phase like what happened last 2007, Everything above follows, until people can’t afford to drive cars to the office, companies get very small earnings due to higher cost, unemployment goes up again and pop! Bull market ends.

INDU is now running at 12400 level, back near to its 52 week high. We manage to get the bottom when it went down into an intraday low of 11500. Sadly, I was able to get into Asian Equity funds by 33%, I was left 66% cash underestimated the strength of the market.

And now, INDU, SPX, and Nasdaq are all in Long term and short term uptrend cycle, with a semi Negative Divergence in RSI, we may expect a slight correction, but in my own perspective, INDU is just gaining strength and will remove out that Negative Divergence with strong gains.

With the strength of Commodities, and with my past experiences, they two come along together. So if commodities are still in strong uptrend. Just follow the uptrend cycle and the formation of “this decade’s early Bubble” with projection of early 2012- early 2013 peak. Just make sure that you are earning more in equity than the increase of Gas Prices :D