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Category Archives: Oil

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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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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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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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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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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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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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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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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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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Crude Oil Weekly Chart: Hunt For The Death Cross!

I delibertly kept off all may wave positions, so to focus on two main indicators. In this case it is always the 50-200 day SMA .  I might call the Death Cross as (DC) and the Golden Cross as (GC).   I also high lighted the wedge, which is very bearish for oil.  Just after the 2014 top the dreaded Death Cross struck. We all know what damage the death cross can do, so we have to have respect for it, but traders can use it to their advantage before it happens.

Count the crossings and watch the sequence they produce. In a 5 wave decline we could get two Death Crossings, and only one Golden Crossing.  (DC, GC, DC)

After the last Death Cross, and we suspect a bull market, then chances are good two Golden Crosses will develop with only one Death Cross. Sounds like Fibonacci relationships to me.

In June, the 50 day average came up from the bottom slicing the 200 day line again. This is a Golden Crossing, but notice how late it showed up. These are lagging indicators only to help confirm that the main bearish trend will resume. They would also produce high confident short bets on Oil, well in advance of the crossing.

The sequence to follow should be a Death Cross which could be just be 5-8 months away.  Even when we don’t know, I would look at the sequence to always  alternate from the previous crossing type.

I think the world is going to be forced on a deleveraging program, (Crash), that could send $100 Trillion up in smoke. No gold or oil bull will stand up to so much money disappearing back into thin air.

Gold will “NOT” protect you from deflation folks.  The majority  have been brainwashed to think that it does. Some of the two biggest crashes in gold, erased $300 and $500 dollars in 5-8 months.  So a $500 gold crash would be realistic.

I’am waiting for the impending Death Cross in gold a few months down the road, and we might not see the DC until gold crashes under $1047.  If you are wondering why gold is crashing just pay attention to the US dollar. It’s fast becoming a safe-haven as the EU strains under the weight of printed Euros.

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Crude Oil The Bull Market That Won’t stop!

 

This is the September month with oil just squeeking into a new high. The August contract scored a new high but all other contracts months are still far behind and lagging.  I believe an inverted zigzag is still in progress, as the wedge suggests. If we draw horizontal lines back to the bull market, then the $75-$80 price level is going to produce a stiff wall of resistance at the same time.  The $80 price level would also hit my wave 2 price range. In a pure impulse I would not allow that to happen, but in the diagonal world this happens on a regular basis. For over 500 years, Submillennium degree wave 3 has produced diagonal wave structures. Oil’s entire life span is also based on diagonals.  Modern wave analysts don’t care about diagoanls waves as they label everyting like simple impulse waves. Cheating in counting diagonal waves stands out like a sore thumb to me, and I reject any wave count that ignores diagonal wave structures.

Different contracts have different peaks, so this usually wrecks havoc with the wave count, at least in the short term.  Any “D” wave rally can look like this as well, and most of the time you will never know the difference, because the mood in a wave 1 and a “D” wave are much the same.  Every bear market rally we will ever run into, has a bullish mood attached to it. The majority will never learn what a bear market rally is, so we get sucked into thinking that every bull market is going to send prices to the moon.

At the 2011 peak everyone thought we were in a bull market, yet complete retracement ensued.  Gasoline futures are not following as they are lagging substantially. At about the 2014 peak the Gold/Oil ratio quickly jumped to 17:1 after which the oil price imploded. In the last few days this has happened again as oil pushed to 17.24:1 this morning.  If oil stayed in the same spot and gold keeps crashing, then oil would still get more expensive and it doesn’t even have to move.

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Crude Oil Present Rally Will Run Out Of Gas!

I will make this December contract a perminate contract month as other months have some wild moves in them that have much higher spikes than what we see.  The September contract produce a very small gap which oil is in the process of closing off.  We still have the 4th wave peak and since May this peak has not been breached. Technically it should not get breached if the bigger bearish trend is already in progress.  Every counter rally to the bigger trend is a mini bear market rally, and any price support level will not hold, but for only a short time period.  From my perspective price never confirms a wave count, as price is a result of the type of pattern in progress. Did price help you see the oil crash coming? Or did price of the DOW in 2009, tell you that a 10-11 year bull market was coming?  Did the price level of gold tell you that a gold crash was coming?  As long as you use price as your only indicator, then you will get the same results as the majority do. In this game if your not a contrarian you become the victim.

We could be in a wave 2 rally in Minute degree so this rally should eventually die when the big oil bear returns. Commercials are very bearish in their positions, so until they switch, the pressure on oil will be to go down not up.  Most E-wavers ignore these types of contrarian indicators which can produce massive unexpected reversals. I’m confident that any Cycle degree correction in the commodities world will produce a zigzag with some producing triangles.

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Crude Oil Intraday Wild Ride Update

The trading in the June contract started to come to a halt and it never had enough trades in it to push it as high as the December contract.  When they roll over into the July contract then the July contract pushed much higher. It’s not good to stay late in a contract month, so I took the December contract. There was a 3 wave crash that took oil to a new low, but that lasted all of a few minutes before it retraced that entire “D” wave drop. I could count out the “E” wave a bit different.

When I see a triangle I also have to be prepared to jump one degree.  If I don’t know what higher degree I would get, then I need to scramble to make sure I get one by the time we get there. I’m a big fan of always trying to find a “better fitting” wave count, and not just change wave positions for the sake of having to do it.  The herd of bulls are  looking for higher oil prices as they think that fundamentals somehow dictate higher oil prices.  They freak out about every little move in inventory levels when reports come out that are above or below expectations.  At this rate the oil price will never crash if they can execute a balancing act in inventory levels.  So if the price of oil keeps crashing, does that mean all the tanks are going to be full all the time?  The last thing they want is their tanks full with high price oil, with no room to store cheaper oil in.

Oil storage is big business and smart oil traders have private tanks that go deep in the ground, where  inventory levels cannot be seen. All Trump has to do is announce a sale from government reserves and the price of oil would crash.  Having the faith that somehow OPEC doesn’t cheat with their production numbers is rather naive as well.

A recession is coming folks, and we know painfully well how fast the oil price did crash during the last recession. The oil bulls think that a trade war will have no impact on the price of oil. Commercials have an extreme short position in WTI crude, while the speculators are all geared to the long side. Both groups can’t be right, so something has to break this summer.

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Intraday Crude Oil Update: Wild Moves In Both Directions.

In the last 4 or 5 days crude oil prices have gone wild, soaring in both directions. This kind of action doesn’t send a clear signal confirming any trend in any direction.  Besides these wild swings I believe crude oil is back to its bearish trend. It all depends on our understanding of what a bear market rally really is. From the majority point of view anything that moves up, is in a bull market . Expert analysts jump on the same bandwagon and give us all sorts of fundamental reasons why oil is still going to the moon.

The entire oil bull market produced what can fit into an inverted zigzag with relative ease, and that means “bear market rally” in Elliott Wave speak.  The simple result of a bear market rally is the complete retracement of the entire bullish phase.  I cannot be any more direct about this, as staying invested at the top of a bear market rally can wipe you out in  short order.  As I post crude oil is still on a bullish run where this little wave count gets trashed as I post. What else is new as at these intraday levels, things can get pretty wild.

If oil still has a bearish phase to go through, then gold prices are not going to go to the moon. The Gold/Oil ratio keeps a mathmatical connection that doesn’t get broken or even expire. This morning the Gold/Oil ratio was 19.27:1 which is cheaper than what it has been, but by only a very small amount. In other words, the oil price can crash much further. Gold just crashed down to $1262 so gold is doing a good job of still confirming its bearish phase.

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Crude Oil Intraday Crash Update.

Since the peak last month nothing that has happened indicates a correction has taken place except for small counter rallies.  (Mini bear market rallies)  We have to understand any bear market rally is they will determine if we should hold a bullish position or get the hell out. There is nothing more horrifying than think about a bull market that some say is going to $300, but it turns and crashes to $40 or even lower. Bear market rallies in any degree always retrace themselves, so there is no sense in staying, as bear market rallies make for excelent short bets.  The trick is spotting a bear market rally before all others do and I will keep trying to do that as we all need that information early.

Most of the oil bulls do not understand the concept of a bear market rally as they treat anything that goes up as a real bull market. In commodaties and oil specifically is in a big Cycle degree wave 4 bear market, with most of them being giant zigzags. It may take the rest of the summer to play out so expect some wild counter rallies like we just had.

I switched mywave count to another wave 1-2 in Minute degree but ultimatley we need 5 waves down in Minor degree or one zigzag in Minor degree. Any zigzag could form where the “B”wave looks just like another 4th wave rally. These types of rallies would be very hard to spot if we’re not looking for them.  All this trade war rhetoric is just to much for the oil bulls to handle. Maybe $50 billion worth of duties, the markets could handle, but $200 billion, was just too much.

Fear drives the commodities, not some logical fundamental explanation why oil is going up or down.  Sure I can see another world oil glut coming up, but we know that oil gluts are very bullish for the price of oil. The last record oil bear market low was about $28, which technically should be breached again, if the 4th wave peak is on its true location.

My wave counts may make little sense to some, but my oil wave count starts with the 2008 peak. This makes the oil bear market about 10 years old so far. Thinking in 4-5-month steps, we could see September/October with another new record low.  I may be very bearish on oil, but I assure you I will turn very bullish after this 5th wave plays out.

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Crude Oil Intraday Crash Update

Since late last night oil topped after which it produced a great swan dive.  Any asset class that was this choppy can always have a counting issue and therefore go higher than expected, but only time will tell if this crude oil counter rally is finished.  A move where crude oil falls below $64 will settle that argument, as bear market rallies are always completely retraced. The story that Europe is awash with crude oil was interesting.  They say, “It’s an unusual occurrence”. Europe is just hedging their bets on buying cheap US crude and not relying on Russian or mideast oil. It’s the perception of excess oil (glut) that can turn oil bulls into oil bears instantly.

We are going to get many more of these fake bullish moves, and each one will produce excitment thinking the worst is over for the oil correction. In the eyes of the public anything that goes up is in a bull market, but from an Elliott Wave perspective we can have very large bear market rallies.  My big bear market wave count starts way back with the 2008 peak, as we must never lose focus from where this WTI crude oil wave count comes from.  I’m sure we will see another counter rally in the next few trading days, but if the rally is finished, then no new highs should get established.

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Crude Oil Intraday Topping Pattern Review

This morning crude oil created another higher high. There can always be another spike higher but this rally sure looks like it is fighting the bigger trend. Over lapping wave structures is the first clue, and a wedge is another. You usually don’t get one without the other as most bear market rallies can turn into wedges. The “C” wave part is all diagonal as it started near the bottom.  The only way we can see these small zigzags is with a 30 minute scale chart.  Anything bigger and you would not see many of these small zigzags.

The wedge looks impressive but we can dream up wedges just about anywhere if we are very biased. I believe there is more downside to come this summer so jumping on the oil bandwagon could overload it at a time, when the wheels are ready to fall of.

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Crude Oil Intraday Bullish Update

Crude oil has been in a rally but this rally is so choppy that oil looks like it still is in a counter trend rally.  We may still have more upside but this rally should end and then resume its bigger bearish phase.  The December contract is still $1.21 lower than the June contract and over time I would expect that to change which could still take many months to switch.  The December contract is also very busy so I may switch to the December contract soon.

Panics happen when a small group sees the same thing at the same time, and any unexpected inventory number can do that.  Markets will always do the opposite of what ever trend the majority have established, as the majority can never win at this game. The majority never practice buying low and then selling high becuase they only love it when things go up. If not enough bulls keep buying then sooner or later this crude oil bullish phase will have a hardtime in staying with this northerly direction.

Those traders that can play both ways care little about fundamentals as they only care of what their TA is telling them. On a short scale we could also be facing an inverted wedge which is also very bearish.  Overall I remain bearish until a correction completes that will push oil into a new bull market phase.  So far this idea is pretty remote but by the fall the bearish phase will show itself to more participants.

I see the $40-$45 price level as a good resting spot but if any rally is still choppy, then even the $40 price level will not hold.

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Crude Oil Just Keeps on Crashing!

I have about a week or so before the June contracts expires, after which I will move to the next busiest month. I made a small degree change as the last thing I want is a degree that is to big early in the game. As I post oil is in a bit of a rally, and it to should come to an end.

In the long run, the big question is, “if oil was in a big bear market rally?”  Very few investors and analysts know the difference because any asset class that goes up by more than 20% is a bull market from their perspective.

In commodities a conventional 20% move is just a little bee sting. From an Elliott Wave perspective this is not the case as we can have 70-80% bear market rallies, that completely retrace their entire bull market moves.  Oil has done this once already, but that late 2015 low may still be a fake bottom. We may hear about the $45 price level become support, but I always ask, “Support for what?”  Support for the start of a brand new bull market, or just temporary support before the final leg down?  They used the excuse that inventory levels are too high, but that has happened many times already.  Storage and large crude oil carrier loading and off loading terminals as being built and expanded on, around the world. The last thing that any oil traders wants is to store high priced oil. Storing low price oil, they can make money on. They will pull out all the stops and even lease large crude oil carriers to store oil in. A month or so ago they declared the oil glut is officially dead, but that is a bad omen and not a good sign at all. The markets always do the opposite of what the majority think will happen, as “all” oil gluts of the past have produce major oil price bullish phases.

From a major oil glut in early 2016, it took fundamentals over 2 years to catch-up to the oil price. I’m pretty sure we are going to see another oil glut before we ever see another real oil shortage.

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Crude Oil Trade War Update.

Crude oil is on the verge of crashing through short term price support. The gloves are coming off, in the war on trade as they all try and fight back. All this trade war talk does it make you want to jump out and buy commodities?  My bearish stance on oil has not changed one bit even though there are many experts out that are still beating the bullish “oil drums”.  All the price forecasting in the world will not come true, if we don’t know the difference between a real bull market and a big bear market rally.

Recently they got worried that inventory levels have decreased , and then no sooner did they post the news, another report comes out saying the exact opposite.  I’m not concerned about any crude oil inventory levels as the big crude oil traders will buy, build or rent more storage space that prying eyes cannot see.  Traders don’t make money storing high priced oil, they make money storing low priced oil waiting for a price rebound. In South Africa there is a big crude oil depot that has huge storage capacity by going  deep below ground. More daily oil flows around South Africa than what travels through the Suez Canal so Cape Town is a prime location for a major world storage hub.

Another oil storage trick is to rent large crude carriers and just float them until prices improve. Some of these VLCC (Very Large Crude Carriers ) can hold 2 million barrels. (About 2000 contracts)  I’m sure that floating storage will come into play again in the next few years, and when it does it will be all over the oil news blogs. When all the oil storage is used up then the price of oil will rally.  There is no real shortage in oil to justify lofty expert price claims, as they have failed every time. In 2008 they were calling for $200 oil but oil then crashed to $34! We may get a brief halt in the crashing oil price, but that may not happen until crude oil gets close to the $40-$45 price level.

When commodities crash they can do so, with amazing speed, and that famous excuse, “It’s Different this time” will not stop an oil crash.

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Crude Oil Intraday Rally Update

In the last 3-4 days crude oil has been in a small rally which sure has the pattern of a triangle. We are just finishing what looks like another zigzag “E” wave so anoterleg down should happen, followed by a bigger rally retracing any 5th wave we may get.  A triangle forces a degree change as well which could end up at a wave 1 in Minor degree.

All bullish oil news in a bear market will never turn a bear market into a bull market, as bear market rallies are all starts to a fake bull market. Many still believe that oil is going to $100 or even $300 as one biased expert claims.  Crazy bullish forecasts always get mentioned at the tips of bullish phases, after which the market crashes. It’s not any different this time, as the only thing that has changed, is we are in a different time period, after all were not in early 2008.  Any unexpected bearish move will force “all” bullish players to reconsider their positions.  They can do this by moving up their protective sell stops,  just below my wave 3 in Minute degree. Very few traders have the account to maintain a bullish position, besides the smart traders saw this oil crash coming.

The $66 price level will be a set-up for a downside breakout, with the potential for a diagonal 5th wave to develop. We have a long way to go, and it may take the rest of the year to play out.  All my commodity Cycle degree 4th waves are zigzags with a few triangles thrown in to keep us on our toes.

Figuring out where we are in this Cycle degree 4th wave is different between many commodities, and we are still far away for the “A” wave in Primary degree to arrive.

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Crude Oil Intraday OPEC Bear Attack Update.

We all now know the reason for the oil crash as the blame is all about OPEC increasing their crude oil output. Bears always attack from the top down and this time it is not any different than what happened in any other bear attack that oil ever had. This July contract is already well below the $67 support price level, and my bet is that much more downside is to come.  A Minuette degree 4th wave rally is still in progress, so that needs to play out before another leg down can happen. Any next leg down will run into a new set of 5 waves, but this time it should be 5 waves in Minute degree.  If any oil analysts are  looking for price support, then they clearly don’t understand a potential bear market rally.

The majority don’t know the differnce between a bull market and a big bear market rally, which the EWP is supposed to tell us the difference. From an EWP perspective all bear market rallies get completley retraced. The crude oil move from the 2016, $28  bottom, oil moved a net amount of about $44!  Even just a simple net 50% correction would send oil down to the $50 price level. Oil still has a very big base at the $40-$45 price level, so anything can still happen during the rest of this summer. All the COT reports still  show the commercials in net short positions and until that changes dramatically, the oil bearish trend should continue.

The Gold/Oil ratio is starting to get very close to 20:1 which needs to expand much more as the oil price keeps declining in price.  Sooner or later the oil price will take the gold price with it, as the ratio keeps gold and oil locked together.

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Crude Oil Intraday Crash Update.

Crude oil has a bit to go before all of the May rally is  completley retraced. It also means that the fundamentals reasons they used for the price rise were all bogus. They were baffling us with bull shit like they have done many times before. Breaking below the psychological $70 price level is very important as now the entire world of analysts will look for all the bearish fundamentals. The big question facing all participants regarding the oil bullish phase, is if it was a true bull market or just another  big fancy bear market rally?

Very few analysts know this and the emotional players know even less what a bear market rally is. From an Elliott Wave perspective every bear market rally gets completely retraced. All my work is done from a Cycle degree perspective and in the case for oil the big peak in 2008, is the Cycle degree wave three top. Since then oil has been in a huge bear market that still has not completed.  The initial 2008 crash was followed by a big bullish phase, which convinced many of the experts that oil will never fall below $100 again.

What followed was another oil crash that completley retraced the entire oil bullish phase. From the 2016 bottom to our present May top was an Intermediate degree move, while $110 at the 2011-2013 top was a Primary degree top. Our present top is only “one” degree lower, yet that represents about a $43 oil price difference. Some analysts flip degree levels around like flipping hamburgers, but they don’t realize that being out by only “ONE” degree does make a huge difference in forecasting any price changes. Prices pull fundamantals up and down like a big bull or bear will follow you around with a big ring stuck in it’s nose.  Forecasting a big price move also forecasts the new fundamantals when that price crash has arrived. Since I have labeled this an Intermediate degree move, I basically have a conundrum. If I make a one-degree change at this top then all wave counts going backwards must all be checked and recounted. Cosmetic wave counting will not do it, as it’s all about the structural changes that have to be made. Being out by one degree, we can be out by a minimum of 61%, which is the same as the (.618) Fibonacci ratio.

Now the guessing game will start at what price level oil will bottom. Bottom for what? A bottom that breeds a new bull market or a bottom that confirms this rally was just another big bear market rally?

If I use an Intermediate degree “A” wave peak for our present top, then I have just bumped all my oil wave counts into the SC degree world. Of course a one degree change in oil, would also put all 30 of my Cycle degree wave counts into question. Needless to say being out by just one degree is very important from my Cycle degree perspective.

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