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Category Archives: ENERGY

Natural Gas: Impending Correction Review?

The vertical move in the last day or so cannot be maintained as past historic spikes have obviously confirmed.  I understand a cold spell may have set this off, but what else is new. It’s the vertical move that could be the end of a run and not the beginning.

I also have an “A” wave peak in Intermediate degree but I have other choices as well. This bullish phase has been running since 2016, and since looks like an inverted zigzag I have look at it like’s a bear market rally as well. If this is a bear market rally, then a complete retracement of this NG bullish phase.

We’ve had three bear market rallies which all were completely retraced, so who says we can’t get the 5th bottom?

With my “A” wave peak then chances are good no new record low will happen but a good corrective wave has to form to convince me otherwise. Natural Gas is another prime example of diagonal wave structures, as there is nothing but overlapping wave structures everywhere.

For a correction, NG could drop well below the “B” wave bottom I show, and it would take time to play out. FOMO is also always part of any move, but so is fear of losing.

The commercial traders are short Natural Gas, but not by that much.  My Market Vane report this week showed about 77% bullish which is pretty high, but may not go to an extreme. Anything above 90% bulls, we are entering the extreme side of prices after which they can implode.

 

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Crude Oil Crash And Rally Update.

Crude oil created a fast move to the downside which usually happens just before another turning. On the daily chart this left a nice spike and the potential for a turning as oil bears could be in a small bear trap. Crude oil stopped dead at $54.90 and has now been in a rally that may not be finished. We could have  landed at a potential “A” wave in Minor degree, but we need time to help confirm this.

Any “B” wave can be a flat type with the first move being a zigzag. Two zigzags back to back and then 5 waves up in Minute degree could finish this rally. That’s if we were in a perfect world, as oil could drag out going sideways in a triangle nightmare as well.

What I really noticed shortly after the oil bottom on the 13th, was that the amount of bearish news just exploded and became, “Intense”. Opec is freaking out as they try to cut production again. The oil world is in such a turmoil state that fundamentals can change very fast from one week to the next.

https://www.cnn.com/2018/11/14/business/oil-prices-opec-what-next/index.html

One announcer called it the end of a 10-year bull market in oil! What? It was early 2016 when we had our last world oil glut which is not even a 3-year bull market.

The Gold/Ratio got a little better but is only a bit over 22:1,  which is nowhere near any extreme at this time.

Crude oil could also slip to a new low but then reverse just as fast, as an expanded bottom can still happen as well.

 

 

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Crude Oil Daily Chart Crash Update.

It could be a bit early, but I think a reversal is coming as crude oil is forming a great looking spike with this daily chart.

WTI crude oil price is also approaching the Fibonacci $55 price level and potential support going back to early 2017.  It could be a violent reversal as some fundamental news will come out and get the oil bulls all excited again. The $56 price level is a far cry from the $100+ price forecasts they did have. The Gold/Oil ratio improved nicely and is now sitting at the 21.42:1 ratio. Oil still has a long way to go before this ratio turns extreme, but in the short-term, a rally should ensue.

They have already declared oil in a conventional bear market, but from an EWP perspective, the entire bull market could be a bear market rally. Using stock market descriptions in the commodities markets is like mixing oil and water, they will not work if we don’t understand how big bear market rallies can actually get!

How high the counter rally could go is just the best guess, but $60-$67 will start to give crude oil some resistance. Wave 1-2 rally or a “B” wave rally in Minor degree would also work.

The crude oil price is still crashing as I post, so trying to catch a Falling Knife, will put you in the read very quickly.

Any choppy counter rally that we do run into would be a small version of a “Bear market rally”. The 200-day MA is at the $64 price level after which the Death Cross on a daily chart could also happen.

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Weekly Chart Crude Oil Crash Update. In A Bear Market Already?

 

One oil expert has declared that oil is in a bear market already!  The oil rout became a bear market pretty quick. With all the oil bear market experts hitting the front pages of news blogs, I wonder if they will tell us that the next rally is a bear market rally or not?  Close to a 3-year bullish phase sure had them convinced that oil was going much higher, but as usual, the markets seemed to behave the opposite of the herd! Every ridiculous extreme bullish oil price forecast was tossed around, yet what did the oil price do? It Crashed!

Since gold also crashed below short-term support, you would figure the Gold/Oil ratio would change. This morning the Gold/Oil ratio jumped back to a bit above 17:1, which still makes oil very expensive when compared to gold. This rapid change is nothing new, only that it’s hard to catch if you don’t take readings more frequently. When there is a fast move, then I use that event as a trigger to quickly take another Gold/Oil ratio reading.

What happened this morning, happened in 2014 as well, with the same ratio, just before crude oil prices imploded. That was a bit less than a 2-year crash when oil imploded from $105 down to about $28 USD.

There is a lot more crude oil downside that has to happen before we even get close when oil becomes cheap again. The only question is what pattern has the most likely chance of showing up to this bear party?  I have to keep 2-3 versions active at the same time. Even Crammer got into the oil forecasting business as he says oil still could drop to $40 before we see good support.

The big question is if this decline produces a zigzag, so common in commodities, or a set of 5 waves continue to develop.

No amount of bullish jawboning will change the trend once it takes hold or resumes, so keeping an eye on the COT reports or the Gold/Oil ratio is a more objective look at the oil markets.

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Crude Oil Bearish Update

 

This is just a quick crude oil update which has a lot to do with the fears of oil shortages due to the trade sanctions against Iran. Market moves based on fear never last that long if the real trend is still down.  Most of the oil rhetoric we have witnessed has more to do with the midterm elections that any real fundamental reasoning.  Some analysts also say that there is “no” fundamental reason why oil is heading down.  I laughed when I read that as the “fundamentalists” have no fundamental reasoning for crude oils decline.

Maybe they should look at the Gold/Oil ratio as it was hitting a brick wall at 17:1. Today we are at over 19.53:1, which is a bit cheaper in recent weeks, but not near any extreme at this time. Commercials are not even close to becoming net long, any time soon. That doesn’t mean oil can’t rally, but chances are slim a new trend will develop from it.

Any real support is down at the $40-$45 price level but the Gold/Oil ratio also has to confirm it. The Gold/Oil ratio would be much better between 25 and 30:1, but not match that 2016 bottom of 44:1.

If the declining pattern starts to look like a zigzag then, yes I would turn into an oil bull. The weekly chart 200-day moving average is down at the $52 price level after which we hit a “Death Cross”.

On the daily charts, $65 would get us close to another Death Cross position. The 200-day MA can also give us support so it will be critical to watch once we get closer.

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WTI Crude Oil Weekly Chart Review

 

I have made a few changes for crude oil, as I’m bringing back that a potential 4th wave bear market rally has completed.  Since the 2016 bottom, wild swings and overlapping wave patterns seemed to have been normal for oils bullish run. Technically I have no problem in making this fit as a 4th wave bear market rally, but time will have the biggest impact if it turns out to be true.

All sorts of reasons are being used to justify the recent decline in oil, but what good are these reasons when they constantly change. Not too many experts follow the Commercial hedger’s Commitment of Trader reports but the ones that do I find are more believable.  We are witnessing the results of a trade war where it gets to the point when the inventory of crude oil is piling up. Any news that inventory levels have dropped can send crude oil prices soaring. Even a 61% or more bearish correction may change my mind, but then I want to see a zigzag decline and not travel to new record lows.

This is just one COT report on Oil and the commercials show that they don’t see a huge bull market coming. Mind you the speculators most certainly do. Speculators follow the “Herd Theory” because once a small group turns bullish then all their buddies seen to jump in as well. This kind of action always puts the speculators in a trap, and in this case, they are in a bull trap.

The media reports the action of the large speculators as the smart money, which their not! I have notifications set up from Oilprice.com so this is about as real-time fundamental news as I can make it. It’s never about the stories but it’s all about the intensity of the news. If in one week only 2 oil bearish news article gets posted, but a month later there are 10 or more bearish news releases, then this has increased in intensity dramatically.

China-Turns-Its-Back-On-US-Oil

I would say this is one big reason why the oil price is crashing as the trade wars start to have an effect. Fear about Iran is also overblown as Iran can keep China well supplied.

The Gold/Oil ratio will give us a clues when crude oil becomes cheap again. Today it sat at 19.38:1, which is a bit cheaper in recent weeks but, not even close to being cheap when compared to the gold cash price.  A real extreme low was 44:1 back in 2016, so the Gold/Oil ratio still has to spread a lot! Until some of these numbers change, I have to remain bearish towards oil.

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RBOB Gasoline Weekly Chart Review

 

 

This Decembers 2018 weekly chart of Gasoline Blendstock. When I make the switch to the daily chart settings then the 2018 peak changes as well. This will throw any wave count into a confused mess which looks more like a “Truncated 5th wave” and a diagonal 5th wave as well.  We can argue for eons what the power is when we see a “shortened 5th wave”‘.

Truncated or shortened 5th waves at peaks are extremely bearish patterns and truncated 5th waves at a major bottom are extremely bullish signals. Nobody will tell you this but there is no shortage of real-world charts with major reversals at a 5th wave. Being bearish on a truncated 5th wave is the worst wave counting mistake we can make. Silver is a prime example of a truncated wave structure, as its major bottom was in 1993, not in 1999 or 2000 like most analysts tell us.

Tuesdays Market Vane Report showed about 75% bulls present so this tells me that most gasoline traders are already into the long side leaving little room for another herd of bullish investors still to come in. Besides massive crude oil short positions, the commercial traders don’t see it the way the talking heads do.

From the 2016 bottom, RBOB produced a choppy bull market that sure kept me guessing as overlapping wave structures abounded. This is usually a sign that this market is in a rally that is going against the larger trend. Any sized bear market rally always retraces itself, and it is only a question of time before this will get confirmed by the markets.

The crude oil markets are just about at a standstill as China took no imports from the USA in August. Hurricane season destruction usually doesn’t last that long, besides that the media does a poor job of reporting what is going on anyway.

The biggest draw for RBOB gasoline prices is that huge open gap below. For the next few months or longer, RBOB could also form another zigzag decline, as diagonal waves are all about connecting zigzags.  Either way, expect some violent moves in both directions as the new trend looks like it is down.

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Brent Crude Oil Intraday Crash Update.

 

WTI Crude, Brent Crude and RBOB gasoline, have made a very strange top, which we can see when switching between daily and weekly charts. This happens many times with futures charts, and the shorter version of this explanation is that an expanded top may have also formed. In the last few days, I have been reading stories about what is causing the crash, and to no surprise, there were no shortages of different reasons why Brent crude is crashing. We may focus on OPEC, but at the same time the EPA comes out with inventory numbers that oil traders didn’t like.

President Trump has given a “Green” light for Saudi Arabia to produce as much oil as they want! If that wasn’t a hint that oil prices were coming down, then nothing is!

The “Bullish Exuberance” in Brent crude oil is starting to fade, but how deep this correction will go is still a flip of the coin. We are presently in an oil rally, so more upside could be coming.

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Crude Oil Impending Correction?

 

The 2016 bottom has a different price, with these extra bars I have added. The big thing is that this low sure can fit into my Cycle degree wave 4 low. Yes, they are all diagonal wave structures, which contain connecting zigzags.

The bull market from the 1999 bottom to the 2008 peak contained a zigzag, so I would be looking for about the same pattern to develop. The Gold/Oil ratio has hit below 16:1 today, but that may still be not enough to topple or correct this oil bullish phase.

Everybody is talking $100 oil price, but I think the $89 price level might have more importance this time. The most challenging pattern until Cycle degree wave 5 is reached, is 5 diagonals waves, where this would be an “ABC1” wave count in Primary degree.

Heating oil and RBOB gasoline have an 88% reading of bulls present in my recent Market Vane Report (M.V)

This does not mean, that more bulls can’t come to the party, but it means there is not much room left on the bullish side. Any vertical move has a speed limit to it, as most vertical moves cannot be maintained.

Can gold head north and crude oil head south at the same time? Yes, they can, but the gold/oil ratio will not allow that to happen for very long.

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Natural Gas: Weekly Chart Bullish Update

 

 

The 2005 peak is about as close to Cycle degree wave 3 that I can get. What followed surely looks like an impulse but it belongs to the diagonal world. With winter coming on, it would be futile, or a waste of time to chase any bearish outlook at this time.

A quick look at the COT reports, the commercial hedgers are net long while the speculators are still net short.

 

Both groups can’t be right, and I know that the speculators are the trend chasers, who still see a bearish decline coming.

This is also where the falling wedge looks pretty obvious if know some basic technical analysis. Experts can spew all the fundamental rhetoric they want but when they know nothing about falling wedges and the major bullish phase that they can produce, they will be wrong every time!

Fundamentals will always tell us the wrong things at the extremes, as markets always do the opposite of what the fundamental, indicators and analysts forecast.

The wedge is holding NG prices down for now, but keep an eye open for a breakout that we could still get this year.

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Crude Oil Daily Chart Bullish Wave Count Update.

 

I have been working on all my long-term oil charts and I think that 2016 low is a Cycle degree wave 4 bottom, which means  this bull market has much more to go, but we could get a violent reaction as the Gold/Oil ratio is at 16.62:1, the most expensive reading I have so far.  A fast or violent correction in oil would change that ratio around a bit. If we continue then a ratio of 10:1 or event 8:1 may still happen. I changed my positions and started a 5 wave sequence in Intermediate degree, which could lead up to a Primary degree “A” wave.

All commodities have a diagonal idealized custom pattern I visualize, taken from the real world lcharts ike the CRB index.  A short example of this diagonal is the ending diagonal in our EWP books, but just forget the “ending” part and stretch it 600 years. The DOW up to the early 1920’s were all diagonal wave structures. This stopped as financial instruments were invented and the majority of people could own stocks. The more people in the markets smoothed all the diagoanls waves out.

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Gasoline Cycle Degree Update.

 

This gasoline futures chart is on a different wave pattern as it’s Cycle degree 4th wave bottom was in late 2008 not in 2016.  The British Pound is very much the same so it’s not an isolated rare pattern as the 2016 bottom would be a running type wave.  This doesn’t mean a very deep correction is coming as another leg up may still happen in the next few years. Even Brent hitting the $80 price level, may break-out to the upside again. This has taken far to long for a bear market rally, so that always forces me to look for a better fit. More and more commodities are seeing Cycle degree 4th wave lows,  and that should only increase in the next few years. By about 2022 many other stock indices will join the 4th wave Cycle degree club.

I keep track of all the completed 4th waves under a seperate page heading, so check that page as the Cycle degree 4th wave count is growing slowly!

In this case the huge gap we do have can also act as support, as prices also repell from gaps. I’m sure in the future that this monster gap in gasoline will close off, but that may be a Supercycle degree crash when it happens. Gasoline is just in a huge zigzag bull market and between the two sets of 5 waves virtually any pattern can develop.  I haven’t checked the weekly chart Death Cross but the 200-day MA could be support, as on a daily chart we could hit a Golden Cross. Even now the correction is not as impulsive as you would expect, so this can always crank up and add another leg to this insane bullish move.

We can also see a big H&S pattern, so if gasoline prices are still very bullish, then the right shoulder will not hold and a push higher should happen. In a bearish situation a H&S pattern like this would go to new record lows.

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Crude Oil Weekly Chart 2008-2016, 8 Year Bear Market Review!

 

Last week things changed as there is a 99.999% chance that gold has a bottom at the $1160 price level. This also forces me to make changes to my oil positions as it refuses to die, or correct at this time.  All commodaties are zigzags linked together which follow a completely different idealized wave structure than what stocks do. When we choose to ignore them, then our wave positions will never produce positions we can’t stay in for more than a day.

The biggest clue that crude oil is in a diagonal, are the 7 waves up from 1999 to the 2008 peak. (3 years before the gold peak) All experts call the bull market to 2008 as 5 waves up in Primary degree but I count 7 waves up, which means a diagonal wave structure is in progress.

We can only wait for so long before we have to throw in the towel and succumb to the oil bulls. I moved my oil wave 4 in Cycle degree to the 2016 bottom  and this would technically complete my 4th wave. Oil will enter my Cycle degree 4th wave club, and gasoline should as well once I update it.

If the wave 4 in Cycle degree is in then oil will produce another zigzag looking pattern, but that may not happen until gold hits it’s “B” wave peak. We can’t have a strong gold bullish move to the upside without the Gold/Oil ratio making a big move as well. The ratio stood at 44:1 at the 2016 bottom, and has now hit 17:1. This is an extreme but could also just produce a correction.

Even Brent crude may join my Cycle degree 4th wave club, and I will update the Brent crude wave positions when I can.

I will not trade any oil related asset classes as the gold market and ETFs is my trading world. If gold is going to lift-off then the oil price should react bullish as well. That would be something if gold continued its bullish return, as then the Gold/Oil ratio will not stay the same.

When we count from the crude oil 2008 peak, the 2016 bottom gave crude oil an 8-year bear market, which makes a much better Fibonacci fit.

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Brent Crude: Still Pushing The Bullish Buttons.

 

One more push to a new record high! Sure that can happen as we approach the $80 price level again. Of course the stories about oil going to $100 again all are starting to sound like a broken record stuck on “repeat”. Can a 4th wave rally surge this high and still be in a bear market rally? Of course it can, as it could even dip into my wave 1 bottom. Commodities play a different game and normal wave counting methods will never work. This is all part of a Cycle degree zigzag correction which has 3 parts to it.

It may seem like the 2015 bottom was part 3, but fooling the majority all the time is the job of the markets. When the Gold/Brent ratio is an eye-popping 15.10:1 then we are pushing the bounderies of being very expensive when priced against gold. In the long run I’m sure we will end up with another major world oil glut as recessions happen every 10 years or so. Any recession in the future would be over as soon as solar cycle #25 starts to break through.

 

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Crude Oil December Contract Intraday Rally Update.

 

A beautifull counter rally is happening but due to its vertical move, this rally can’t be maintained and must correct or even end this inverted zigzag. If the bears are in control of oil, then this little zigzag will get completley retraced. If this is correct then we will still see many of these bearish rallies develop during the rest of this year.

 

The commercial traders are about as bearish as you will ever see, while the speculators are in the biggest bull trap that you will ever see. This makes it next to impossible for crude oil to charge into some bullish phase that many analysts are still forecasting.  Fundamentals will “always” tell us the wrong things at the extremes, especially when the experts all are thinking alike! When they all sound or think alike, then chances are good it’s an instant short bet!

I also have what I call my “Ratio Pool” which contains about 20 Gold/Ratios in the ETFs I track. Nobody I know of keeps a ratio group of this size, and only with face to face meetings can this be explained in detail.

There is a mathematical connection in ratios that will never break, but they swing from one extreme to another. I sample the Gold/Oil ratio 2-3 times per month, and my latest gold/Oil ratio has been at 17:1. This is already at an extreme as the Gold/Oil ratio has been hitting a brick wall for months already.

Even the Market Vane Report doesn’t confirm a huge bullish phase to come, even with hurricanes forcing a spike in the oil price.  As soon as any storm passes the oil price will start to crash again.

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Blendstock Gasoline Daily Chart Update

 

This is the December gasoline futures chart and it had it’s last extreme peak back in May of 2018. In this case gasoline was leading the way in its bear market. A short zigzag that looks like a flat is very common in wave 2 bear rallies. I call them running zigzags just like a flat, as I use no “truncation” as an excuse why a certain zigzag did not extened any further. Zigzags also streach so long that it’s hard to believe it’s a zigzag. The 1929-1932 bear market had an extended “C” wave far exceeding anything in our EWP book. If it happens once in the real world, then I use it for all degree levels.

In any wave 2 rally situation we know that the Death Cross is just below present prices, with the 200-day MA just below the triple bottom support price. Gasoline prices are going to head south as gasoline is also in an Intermediate degree 4th wave bear market rally. All bear market rallies completley retrace themselves back too and below the point of orgin, which was in February 2016 at the $.90 price level.

You can read every single fundamental reason but fundamentals “ALWAYS” tell us the wrong things at the extremes! I always bet against any wave count that is just as bullish as the crowd is.

On the monthly chart the Death Cross has already happened with the daily chart next, and then the weekly chart Death Cross further down the road. Technically the Death Crosses are about as bearish of a set-up you will ever run into. Wave analysts, investors and fundamental analysts are basically oblivious to any Death Cross fact.  Smart people have been using the 50-200-day MA since 1929 so it has a long history of forecasting huge bear markets.

This could take all of 2018 to play out, and my in-house indicators will start giving me feedback when the readings start to shift to the bullish side again. In this case not until wave 3-4-5 in Minor degree have played out. A deflationary, crash or depression-like conditions are coming, and the main reason is that an entire boomer generation is now retiring at a pace of 10,000 per day, for the next 18 years!

This will overwhelm any pension system as all “boomers” will be drawing on something that has no money in it!  The government pension system is so underfunded that my boomer generation will suck it dry!

We are facing a dual H&S pattern which when found at major tops, is also very bearish! In addition to all this the gasoline weekly chart contains a rising wedge which is also about as bearish of a situation as we will ever run into. This doesn’t even include the massive gap still open below us, on the weekly charts.

 

 

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Crude Oil Daily Chart: Impending Crash Review

 

Since the early 2016 low oil has been in a bear market rally in Intermediate degree.Many are convinced that the world is running out of oil and that higher price could happen at any time.

Folks we have a big triple top, which created two fairly large H&S patterns. This is about as bearish of a signal that you can get as Blendstock gas is looking much the same.  I checked for the Death Cross and it has not happened yet but is next inline to do so. That might not happen until crude falls below $60. On the monthly scale we have a different situation, where the Death Cross has already happened.

This is about as bearish of a technical signal you can get and fundamental analysts ignore them on most part. Fundamentals will always tell us the wrong things at the extremes, as commodities  always go the opposite way of what the majority think.

The Gold/Oil ratio is as close to 17:1 as we can get and that was the same extreme ratio when oil crashed in 2014-2015. You can stretch and compress any ratio, but you can “never” break the mathematical connection. I keep a group of about 20 Gold/Ratios and it gives me feedback instantly. When someone forecasts a crazy gold price like $2225 then at 17:1 we should have $130 oil.

Oil will most likely go below $12 before we will ever see $130 crude oil. Gold investors that think that oil can imploded while gold soars are in living in a fantasy world. The world is going through a deflationary crash and bear market, that nobody expects.

Oil topped 3 years before gold, back in 2008 and what you can see so far is just a big zigzag crash in Cycle degree, which is still not finished. KOL is another Cycle degree zigzag crash, as well as the US dollar has done. All conditions that were before the 2008 crash are present now, and worse.  You don’t want to be bullish on oil when it is sitting on a potential Death Cross.

Chances are good this world is going to get another oil glut and then when they all start to think alike, then the oil market will turn and soar once again. All commodities are connected with giant zigzags and oil is no different.  Any SC degree wave 3 peak in oil should not peak until 2041, so that is a long wait if you are an investor.

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KOL: Cycle Degree Wave 5 Review!

 

I’m convinced that the pattern of this KOL crash is a single completed zigzag crash that had its start back when all energy related EFTs started to crash. This was 3 years ahead of all gold related peaks which is also a Fibonacci number. The secondary peak in 2011, matched the precious metals mania peak. Previous presidents killed the coal market but president Trump sure brought it back to life. Sure, I like clean energy just like anyone else, but they can also use some very clean coal burning technologies that scrubs many of the harmful by-products that are associated with coal burning as a source of electricity.

Commodatity wave patterns in some respects look like normal patterns but “ALL” commodities are connected with giant zigzags. Using normal stock market wave analysis will never work because we have to count them like big diagonals. Diagonals are the wildest patterns you will ever run across and they must be labeled correctly if they are being used.

If the 2016 bottom is a 4th wave bottom in Cycle degree, then we could be facing a big KOL correction with the next major peak not expected until 2o41. That still leaves lots of time for a huge bear market to still play out.  KOL should not break to new record lows if  the next big bullish phase is in progress.  I will not count out all the little waves as there could still be many adjustments along the way that will need to be done. I will not be trading this ETF as the gold sector has all of my attention, but KOL offers a climpse into the future that is too hard for me to ignore.

There may only be a few Cycle degree 4th wave bottoms completed, with the US dollar index being another.  2018 seems to be a peak at this time, and not until I see that a clear or better looking correction has taken place, will I turn bullish on KOL. 2019 could be positive for all commodaties, as a rebound is most likely to happen.

Deflation is coming so for the next three years KOL could act very bearish. The start of solar cycle #25 should turn KOL into acting bullish, as solar cycle bottoms are bear market assasins!  Markets usually crash 1-2 years before solar cycle bottoms,  just like they did during the 2008 crash. KOL and stocks hit bottom together in 2009 as they seemed to synchronize very well.

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Gasoline Daily Chart Quick Update

 

Since the May 2018 peak gasoline blend stock has been going sideways which just about looks like a triangle.  I see a potential inverted zigzag that could be in progress, and once they drop then we should expect a Death Cross to happen. Death Crosses rarely happen very close to the top, and this chart would still have to dip deep for the 50-day MA to slice through the 200-day MA.

Yesterdays Market Vane report with Blendstock Gas and Heating oil showed close to 80% bulls present. 24 month bullish high has been around 80% as well, so these numbers tell me there is very little room left for traders to flock to the bullish side.

Markets have been pretty slow today, but this all could change as we count down into the fall.

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Brent Crude Weekly Chart Update

 

Brent crude is struggling trying to break higher, and next month should tell us more if this so called bull market has any chance to soar higher. I see a rising wedge which is an extremely bearish pattern, which should never be ignored. The bullish phase that started in early 2016 is a bear market rally from my perspective and in order for that to get confirmed then Brent crude will completley retrace this bull market and crash to new record lows. Deflation is coming folks, where commodities also take big hits in prices.

Today the Gold/Brent ratio is sitting at 15.84:1 which makes Brent more expensive that I have records for. I will continue to calculate this ratio, so I have a better longer term data base to work from. In many respects the Gold/Brent ratio is the same as the Gold/WTI ratio is from which I have a huge data base of ratio records.  I have a pool of about 20 ratios that I keep and is one of my best in-house generated signals. Math doesn’t lie, only people do, so ratios are a good objective set of indicators to follow. Very few are willing to do this work, so out working the lazy analysts is a walk in the park.

You can tell any lazy wave analyst by all the detailed wave counts they always make. I always try to be 3 steps ahead of the crowd and confirm a wave count 3 degrees lower, which is also 3 steps ahead of the crowd. Being one step ahead of the crowd is not good enough in today’s world, when we make longer-term trading decisions. There is no way that gold will soar if the oils are going to crash as the Gold/Brent ratio will stop that silly thinking in a flash.  Any kid that knows how to track the Gold/Brent ratios can do a better job of forecasting the oil price than what the experts do.

At the extremes fundamentals will always tell us the wrong things as the 2008 peak was. The experts did not see the oil crash coming in 2008 as I had it documented very well.  You don’t even need extremes if you pay attention to the news headlines. When they all start to think alike, then chances are very high that they are also wrong.  It just about always justifies betting on the opposite direction when the herd starts to sound all the same!  In the gold sectors this works very well as it is made up of very emotional investors. Oil investors get a bit hostile when you mention that oil can crash to new record lows.

Just look at the nose dive that oil took in 2014 and 2015, so what has happened once before, can happen again.

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Crude Oil Daily Chart Update: Bull Market Or Bear Market Rally?

 

This is the December Daily chart but it’s stretched to 1500 days back in time. I do this to always look for alternates that I may have missed. As far as I’m concerned the entire crude oil bullish phase is nothing but a big bear market rally. It’s an Intermediate degree bear market rally  and this low degree bear market rally is fooling all the hedge funds who at one point were so bullish that it was the most one side trade that good crude oil analysts have seen. It’s the emotional hedge funds that always get into a trap, not the commercial traders. Commercial traders work with the industry, while hedge funds think they are chasing performance, they are working themselves into a bull trap.

The Gold/Oil ratio has been bouncing around at 17:1 and it seems like this 17:1 ratio is hitting another price brick wall. In 2014 the ratio also hit 17:1 and that produced the 2015 oil crash. My entire “Ratio Pool” consists of about 20 ratios and I consider the ratios as in-house generated indicators or tool. Ratios always give us a reality check if they are calculated consistently.

When all the expert fundamental analysts all start to sound alike, then chances are extremely strong that they are wrong! They were wrong when they consistantly forecast $200-$500 oil prices which is what they were calling for at the 2008 peak. (3 years before gold)  At that time the Gold/Oil ratio was about 9:1 and oil had no choice but to crash.

Such a distortion will not clean up with a mere 10-20% correction, as it will take much longer for the markets to become even, and it usally gets oversold on the way down as well.

Of course oil investors are sitting on an impending Death Cross, but the 200-day MA is still at the $62.00 price level. The oil price has to crash below this $62 price level before the 50-day MA bends down and actually crosses. Gold  and silver are also sitting on a weekly chart Death Cross.  It’s not just about one crossing, as the entire investment world seems to be invested on top of impending Death Crosses.  We can also draw in a nice rising wedge in oil, which is another tool I use regularly even when I don’t post them. Oil could break to new record highs, but we’ll deal with that when the time comes.  Summer driving holidays are almost over and hurricane season has been pretty mild.

Trying to forecast where the price of oil is going with fundamentals has never work before and will not work this time as well. Markets always do the opposite of fundamentals as every glut ever produce, started a huge oil bullish phase.  The markets are never right, because the majority of investors cannot making money from the same majority they are mixed upwith.

There are only so many “Greater Fools” that can still arrive which my weekly Market Vane tracks.  Even at 50% bulls present, is still to many bulls. I would like to see less than 20% bulls present, so we still have some ways to go before that happens.

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Brent Crude 2008-2018 Review

This is the September weekly chart with 1500 custom bar settings. The COT reports do not show any real extreme, but the Gold/Brent ratio does. Since May this ratio has been averaging 17:1 .Which is about the same as the Gold/WTI ratio is. They are still so very bullish on oil that recently they say that “$150” crude oil is coming. That will not work as gold and oil are linked via their respective ratios. At 17:1 any oil price can crash like WTI did in 2014.

No Death Cross on Brent has happened, on the daily, weekly and monthly charts! We had the Brent Death Cross at the top in 2014, and the Golden Cross just formed earlier this year. With a Golden Cross already done Brent crude should explode in price! The 50-day MA can bend down and slice right through the 200-day MA. Before you know it the Death Cross has formed and Brent Crude keeps heading south.

The hedge funds with WTI are still so bullish that they are net long by a ratio of 8.35:1. I consider 4:1 ratio to the extreme side while the commercials only have 1.89:1 net short position. The Brent crude COT reports are not that skewed at all, matter of fact it looks pretty boring. I’m very confident at this time, that the  impending Death Cross, has more power than any COT report, but I need to get more confirming evidence to have faith in what I’m reading.  Commercials can also make dramatic flip flops which I saw some of the currencies do.

No little $10-$20 correction will fix the problem. $40-$45 Brent crude could supply short term support but in the end the world is going to deflate and the Brent crude price will also crash. Fundamentals will “Allways” tell you the wrong things at the extremes, and when the analysts all sound the same, then it’s time to bet against them.

The gold price has been closing below $1200 which is not a good sign, as I expect gold and oil to still crash much more during the rest of this year. Brent crude will not standup to this, so it will crash as well. I will not trade any oil move with USO as it does not reflect pure oil very well at all. I closed my USO short position becuase it was so small of a position, I wanted a bit of extra margin space on my US dollar side.

Have patience as by the end of this year we could be facing a different energy landscape. Oil is being drawn to the solar cycle #24 bottom, but after that oil could soar one more time.

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October Crude Oil Update

This is the October contract and they all have different patterns for this 2018 top. Oil takes alot more work to get a decent position at this top, escpecially in trading the little Forex oil units. I have been short crude oil with real money for many months already and most of the time the short trade was in the green, except for the beginning. When I talk about being in the green, I always mean it’s to the good, regardless in what direction I have bet on. Some readers may not understand the concept of trading up or down, and they will never do it.

To be blunt, not knowing how to bet both ways, only allows you a 50% efficiency rate at best! This rate doubles if you can bet down just as easily. When any trade is all green in Forex, then you even get paid some interest for staying in the green.  I do not give out Intraday day trading setups as you will have to find that somewhere else. I trade between Minor, Intermediate, and Primary degree turns, that can take  8-13 months to play out.

The crude oil market is one of the most skewed trades that I have seen since the 2008 peak and crude oil will eventually crash right along with gold and all other markets as well. You can’t seperate oil from gold as they are intricately linked with the Gold/Oil ratio. Ratios are just glorified ways of producing odds, and knowing your odds is the what you must know, to trade in both directions. In the future I will not trade oil, as there are easier pickings in the gold sectors.

The Gold/Oil ratio was just under 18:1 which seemed to be hitting a brick wall all summer long. When oil started to crash in 2014, this ratio was also 17:1. There is no way that I would bet on long positions if they paid me. Then we have the Wedge sending us a clear signal as well, which they call a “bearish Flag”. It’s a rising wedge and they preceed any deadly bearish situation. One of the most deadliest indicators of a longer-term bearish decline, is the Death Cross! The Death Cross on this daily chart still needs to happen, but on the monthly charts the Death Cross has already happened.

In short the entire investing world are in long positions at the tops of Death Crosses, in all asset classes that I cover. A basic market decline/crash is coming and all those who are not prepared will get hit hard.

A bear market rally always retraces everything back down to it’s point of orgin, so only time will tell when this will come true. No little $40-$45 support level will hold for very long. Anything related to the heating and gas sectors, the Market Vane reports over 76% bulls still present. These are very bearish indicators as it leaves very few bulls to join in.

Deflation is going to be the real threat in the next three years, and oil and gold investors still haven’t figured that out yet!

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PetroChina, the first $1 trillion company, has sunk since 2007

https://www.bloomberg.com/news/articles/2017-10-29/the-biggest-stock-collapse-in-world-history-has-no-end-in-sight

This is an old story but they say it was the first trillion dollar campany. It flamed out into the biggest stock collapse in history. Apple has just closed off at over $207 which makes it the third trillion dollar company after Amazon. I want readers to look hard how PTR imploded as I’m sure AAPL or even AMZN will end up looking about the same.  For the last few years PTR has been going sideways and these moves are just bear market rallies and PTR should crash to new record lows by the end of this year.  This pattern is a zigzag folks and even once it hits rock bottom, chances are good another new new zigzag will form.

In late 2007 PTR peaked which is part of the 30 year cycle, and the next Super Cycle may not arrive until a few years before gold peaks.

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Crude Oil: A look at the August Contract Bear Rally.

Fundamentals will “always” tell you the wrong things at the extremes. Was the 2008 peak extreme enough for you? This was also a mania oil peak and part of the 30 year cycle as well. Gold stocks peaked out 3 years later and have been in a bear market ever since. Oil is not on some rocket ride to the moon, as high oil prices kills any real profit growth.  Does this “wedge” look like a promosing trend, because if it does you better learn what a rising wedge can do to a long portfolio. Then add a few death crosses to the mix, and we have about the most skewed oil trade in history, that has only one way to go and that is down. Please do not whine about fundamentals as in the traders world, they are called “Funny-Mentals”. Markets will always travel in the direction that will do the most harm to the complacent investor.

This oil COT report is so skewed that there is no chance any big bullish move is still ahead of us. The top part is all the spectulators and hedge fund positions, that are all extremely leveraged to the upside. Well, when things don’t go their way they will panic and run at a moments notice.

Over the years I  have developped my own in house indicators using a dozen or more gold ratios, which I used to call the 2008 crash. This is when the Gold/oil ratio was about 9:1. We are at about 18:1 right now and in 2014 this ratio hit 17:1 before the oil price imploded. No extreme ratio exists in the Market Vane report yet so that will change by the end of this year. My Market Vane subscription will run out and I don’t plan on renewing it, as I have enough in house indicators to track.

Oil is going to suffer a huge price crash that will be part of a the “deflationary market crash”, not experienced by anyone still alive today. Stock markets and all commodities had Cycle degree wave 3 bubble peaks and their corrections are still far from over.

If you are a trader then I suggest  to always have an emergency phone number  that you can all and they will execute to your insructions. The reason I say that is because our local power went dead in the middle of posting this oil chart.

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August Crude Oil: Will It Hold Its Peak?

You can automatically assume that commodaties are sitting on a Death Cross, even if I don’t show them. I will be reducing my intraday positions as I’m not a day trader, and have no desire to become one. I’m short crude oil in a small forex account and have not been urged  to take profit. Let the bet ride, as the support bullish trend line is not going to hold oil back for any reason.  Traders are starting to get very nervous with any small decline, but they ain’t seen nothing yet. Oil bulls are going to see “red” while the short player sees green. Shamrock Green.  🙄

There are a host of indicators all confirming the same thing, as the commercials are so heavy short that there is no way a super bull market in oil can even get off the ground.

This morning the Gold/Oil ratio was still getting close to 17:1, which means that the Gold/Oil ratio is hitting a brick wall. Of course our great Photo Bomb leader wants a carbon tax to help stop climate change. Carbon tax on oil is the biggest mistake any governmet can make, as it is based on falsified data from the experts. The people know this and the conservatives know they can form a new government, based solely on fighting the Carbon Tax. The world fertility crash will fix the CO2 problem, and my bet is that the CO2 PPM (410) will implode in the next 50 years.

Oil is in a bear market rally,and incase you don’t know what that is or means then I strongly suggest you do some research on it. A bear market rally “always” returns to the point of orgin and below. That makes oil at below $28 a distinct possibility again.

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WTI Crude Oil, Intraday Update.

Every contract month has a different wave position, so I though I would give you the one that looks the most bullish and has reached a new record high.  It has dipped so we don’t need any new record highs. If you see an intricate oil wave count covering every little wave then those wavers are painting you a picture!  There pianting us a picture saying, ” Hey I got nothing better to do and no money at stake, so I can dick with the wave counts all I want.” I have little problem in shredding any wave position you want to show me because they are all just painters playing with a big 15 color Paint by Number set. I paint bear markets and oil will take a huge hit when gold crashes again.

This daily chart has its Death Cross at about $71 so when this crosses then the game is up.  Gold/Oil ratio is at 18:1 which is nowhere near being cheap as it was 17:1 that oil crashed in 2014.  Everything including gold oil and all your commodities are going to get a crushing blow in prices, as they are investing on top of a 4th wave rally in oil and oil could crash back down to $21.  We would be in a glut by then, but as we all are supposed to know, gluts produce massive bull markets that can shock us because fundamentals didn’t see it coming. Fundamentals didn’t see the 2008 oil crash coming, while an oil crash at that time was one of my first publications.

Oil is in a big bear market rally in Intermediate degree, and only a complete retracement should happen.

The recent drop in oil has got the world in a panic already, and we are just getting going so and further drop in the price of oil could get hedge funds on a selling panic to get out other bullish positions fast.

End Of The Oil Rally and World In a Panic Mode   are very typical stories that I look for and it fits in with my bearish outlook very well. It’s only the beginning as oil can crash much deeper than all oil experts once thought. Investors have no clue that a deflationary crash is coming but I will be tracking this deflatinary crash as best as I can.

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September Crude Oil Daily Chart: Record High Again.

I show that oil peaked at just below the $73 price level in the September contract, the August contract has just crashed so there are always differences in prices.  The December contract paints an entirely different picture as the December contract is at least $5 per barrel, this is well on the road to an extreme spread and it tells me that oil’s bull run will not last.

The gold bugs need higher oil prices to support their bullish claims, because you sure will not see the gold price soar as oil implodes. Sorry folks but that ain’t going to happen. Gold and oil are linked by an unbreakable elastic band, which can streach and contract by extreme ratios. The ratio is still around 17:1 which is also at an extreme, so this will change dramatically as we hit the Gold/Oil ratio brick wall! Hurricane season can have psychological reasons why oil is high, but summer driving will also end so the future of the WTI oil price does not look bullish from my perspective. COT reports also show commercials net long in oil, so the bearish indicators are still there and getting worse.

To think that the stock market is going to deflate but oil and gold inflate, then you should check all your premisses as one of them is sure to be wrong. When the oil bulls all start to sound alike, then I know it’s time to short the oil price. I use USO for that as I’m short 100 shares on USO. Sure, any trade will go against you but feathering into any  postion is the key. I can handle alot of Draw Down red, which freaks my friend “JP” when I show him my red positions. My entire short sell group is turning into my best performers so I have no intention of getting out. I trade small positions with ETFs but try and stay in for a 5 wave run. When you ride those bear runs down, then you pat your bear and tell him that he has done a good job. Yes there are buckaroo cowboys that can only ride the bulls, but up here in Canada we also ride the bears! It’s not a fricken horse race folks. It’s a bear and bull ride and to see who can last the longest before being thrown off!

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USO Impending Crash Update

The majority think that gold is still going above $1400 but what happens after that. If a market has just been a bear market rally the gold can crash from $1400 to $800 with little effort. USO and Crude oil will not take this lying down as they will also crash. A bear market rally “must” send USO back down below 2016 lows so that is a very strong bearish indicator to get out of any USO bullish positions.

The only thing USO is good for is for shorting as I will not go long on this ETF for any reason.  My wave counts are working wave positions, and they are not published for entertainment purposes like all other wave counts are!

In general if all bullish retoric all starts to sound alike, then chances are extremely high, that they are wrong, and therfore a short position is the only logical position to have.

 

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Gasoline Weekly Chart: Another Death Cross!

There are no wave positions with is weekly chart as wanted to show how damaging a Death Cross can be if your in long positions.  They say oil is still going to the moon and $150, and the Golden Cross has already formed. These crossings are all lagging to any wave positions but in 50 days or so the 50-day MA could slice down and through the 200-day MA,  instantly the second Death Cross is formed.  We also have a rising wedge which is extremely bearish and a “huge” gap that is still hanging around.

If you start from the 2016 bottom and look up to the 2018 peak, what is it that you see?  Is it a bear market rally, or a full-blown bull market?  Every wave analyst “must” know the difference between a bear market rally and a real bull market. Any bear market rally  “must always” retrace and return below the price point of its orgin. If gas futures hit below $.90 then the markets have confirmed a bear market rally was in progrees.

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