WTIC Oil - A key deflationary sign

Another twisted and bizarre week in the US capital markets. To close the week, lets take a look at WTIC Oil, which remains very weak, and looks set for significant declines next week. First target remains $80, and then the June low of $77. If 77s fail to hold, then the primary doomer target of $60 - in early summer 2013, will be right on schedule.


WTIC, daily

WTIC, weekly

WTIC, monthly2, rainbow

Summary

With the dollar putting in its third consecutive daily gain, it is not surprising to see WTIC Oil decline, losing around 3% this week.

All things considered, the underlying weakness in the global economy - especially the EU, should see continued weakness in Oil prices.

What was especially surprising in recent weeks, was that despite yet another flare up in the middle east, Oil barely moved, and remained well under the big $100 level.

So, look for a break <$77, if we see a few daily closes under that, then the 60s won't be more than a few months away.
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Bonus charts - USD

With the dollar higher for the third consecutive day, I thought I'd also post these up, not least since its important in relation to WTIC Oil.


USD, daily

USD, monthly, rainbow

So, we're 0.33% high for the month so far, after briefly dropping into the 79s.

A daily close in the 81s would be very significant next week, and immediately open up a quick move to 81.75/82.00. That would put serious downside pressure on the equity and commodity markets. With next Wednesday being an FOMC day, things are going to get a lot more dynamic in the US markets.

Have a good weekend.

*next posting, late Saturday, which will probably be on the weekly index cycles.