by Terrence Aym

Created on: January 20, 2011   Last Updated: January 21, 2011

Robert Pretcher is disgusted.

The Yale University graduate, New York Times bestselling author, and top market guru has proclaimed, "Oil should fall to between $4 and $10 a barrel based on a technical analysis called Elliott Wave principle."

The Elliott wave is a technical model based on the Elliott Theory. The theory was promoted during the 1930s by the man who conceived it: professional accountant Ralph Nelson Elliott.

The basic hypothesis summed up by Elliott extrapolates that "because man is subject to rhythmical procedure, calculations having to do with his activities can be projected far into the future with a justification and certainty heretofore unattainable."

So, the cutting edge discipline of advanced technical analysis reveals that gasoline prices at the pump should be hovering around 50 cents. Yet the pump price as of this writing is pushing towards a national average of $3.50 a gallon—about half a buck away from the national all time high of $4.00.

And it's not just the Elliott Wave that reveals oil on the world markets is vastly overpriced. Supply and demand is a driving principle of economics. No economy has ever been able to escape the realities of supply and demand—the defunct Soviet Union discovered that to their chagrin.

Facts

The last time a barrel of oil sold for $10 was during 1974; that year gasoline sold for a mere 50 cents a gallon.

The cost of getting some barrels of oil out of the ground is as low as $1 to $10 a barrel. The average cost to pump crude in Saudi Arabia? About $10 a barrel.

U.S. "energy crisis" self-imposed

Yet the supply and demand that is driving the marketplace for energy—particularly oil—is an artificial construct. Oil prices are not being market driven, they're being driven by political agendas.

Despite the fact that the technical analysis of what a gallon of gas should be worth is accurate, the economic numbers are terribly skewed by policy. For the most part the policy is being driven by the political structure in Washington, D.C. and western European capitals which are hell bent on restricting growth, diminishing wealth, jacking up the cost of energy and squeezing the middle class out of existence in favor of some of the more "religious" aspects of environmentalism.

The huge oil reserves of the United States of America have been declared virtually verboten by US agencies and many elected representatives. While bemoaning America's dependence of foreign oil, policymakers charge ahead restricting the

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