With continued volatility in gold and silver, top Citi analyst Tom Fitzpatrick believes that crude oil is now set up to surge as much as a staggering 63% in 2013. This would crush global stock markets, sending the wildly enthusiastic bulls reeling. Fitzpatrick provided King World News with 7 powerful charts to illustrate the danger this situation poses to the bulls. Fitzpatrick has been incredibly accurate regarding his forecasts so KWN takes his warning very seriously.
Here is what top Citi analyst Fitzpatrick had to say, along with powerful charts: “We have constantly articulated the view through our longer term overlays in particular that the US Equity market was establishing a topping phase that could yield a retracement lower in the months ahead of 20%+.
This suggests that price action in the weeks ahead may be quite critical in determining whether this expected turn lower is going to materialize.
We are now back into the “retracement zone” that fits with both this overlay and also the one below. These have been our favorite “historic overlays” for some time. The 1970’s overlay is our “Number 1” choice not just due to the price action but also the other building blocks from that period:
– Collapse in housing and economic data (1973-1975)
– Surge in Oil price (1973-1974 and again in 1978-1979 - See commodities where we believe the next move higher is underway like 1978)
– Weak USD into 1978
– Bull market in Gold 1970-1980 as well as bullish soft commodity markets.– Fed holding rates too low for too long