Simply put, when a really over extended market becomes even more over extended to the levels of pure absurdity, and media floods with quotes of “big time market wizards” with claims that it can move even way more in the same direction…. I see reversals.
Examples: when silver was pushing $45 I had friends calling me to buy silver because it was going to $100…for sure…any day,…. . Oil pushing $140 with “experts setting $200 targets any day….., Euro at 1.07 with experts calling for .80 USD any day……
Today, I was alerted by a news feed claiming to “forget $20 oil….and to Expect $10 oil”….
Now, I will consider it to be one of the best “buy” indicators for oil today. Not technical of course. Can the oil test $27 or $24 or $17? Yes, of course it can, will it stay there? Not likely, and not for a long time. In a nut shell, I am starting to see an oil bottoming formation, CAD bottoming formation, US Dollar topping formation. Can it keep going in the same direction for a while longer? Sure. A year or two from now we will likely see a historic reversal in many USD currency pairs and commodities.