Crude Oil Intraday Crash Update.

The oil price is traveling deeper than what any other wave count would allow. We have now dipped into the tops of two strong peaks, which trashes the impulse pattern.  From the top in early August, oil produced a sideways pattern that fits well into a “B” wave rally, followed by another 5 wave decline.

So far this decline can fit into a flat  which would be followed with another super zigzag rally, well at least a Subminuette degree 3 wave zigzag. It could take until the $46 price level before we hit bottom, but we have to watch for an earlier end as well.

Inventory levels have been constantly eroding, but the media only report that when the oil price is pointing up. There is too much production turmoil in the world to take any fundamentals to heart. Markets work the opposite of fundamentals with 100’s of years as evidence. In all other asset classes as well, not just in oil. Right in the middle of the worst part of any oil glut,  oil turns and heads north. Of course, all the oil analysts were bearish at that time, talking about being cautious in the oil markets.

The Gold/Oil ratio gives us an objective idea if oil is cheap or expensive and until that ratio shifts dramatically, the larger bullish phase is still in effect.