Crude Oil Monthly Chart Update

This is the June contract month and from the recent late 2018 bottom, crude oil looks like it wants to soar.  This may happen in the short term but the commercial trader’s positions do not support a major bull market to continue in oil. If the COT report showed that commercials are adding many long positions, then I would think otherwise.

World growth is slowing down and the oil trade wars are not going away as well.   Crude oil has been in a bear market since July  2008. Oil has tried to break out two major times and each time it failed to get its mojo back. The big question is if the 2016 low was the real bull market low, or will oil crash to new record lows again.  A complete retracement would sure confirm that our recent bearish rally has the oil bulls in a bull trap.

This could take the rest of the year to play out so don’t expect anything to happen just yet.

The Gold/Oil ratio became a bit more expensive in the last few weeks or so as it was 22.8:1 today as I post. Now if this same ratio were heading to 30:1 or more then chances are good I would be very bullish on crude oil.

Switching oil to a Cycle degree triangle may only last until the digital paint has dried. March is also a good month for reversals so we just have to have the patience, to see if the oil bear is going to attack again.

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Crude Oil Monthly Chart Death Cross Review

Crude oil follows the Idealized diagonal wave patterns which are mostly zigzags connected together and count out with a 7 wave count.

To put it bluntly diagonals can count out with, A,B,C,D,E, or  (ABC1,ABC2,ABC3,ABC4,ABC5) and or W,X,Y,X,Z.  They are all the same patterns and the only difference is where they are found.  Waves 1,3 and 5 can be zigzags and wave 2 and wave 4 can be flats, triangles or complex zigzags.

The history of oil only started in the 1840s. From 1980 to 1999 there was a Triangle inside a “B” wave, followed by a bull market where I now only see 7 waves. All other expert wave analysts saw 5 waves but the 5th wave was far too small so they forced a Primary degree 5th wave into the pattern.

Forcing a wave count will never work, and believe me I tried as well as I got sucked into believing that 1999 was a Cycle degree 4th wave low!

Many good contrarians saw the 2008 oil crash coming and never believed in the “Peak Oil” bullshit. Obviously, history has confirmed the Peak Oil BS, and about 8 months later crude oil was in another world glut!

The Gold/Oil ratio in 2008 was 9:1 and oil only had one option and that was to crash. By early 2009 this ratio stood at about 25:1. Oil rallied from a real-world glut as the experts were looking for lower and lower oil prices. Expert fundamental analysts missed most of the major important turnings. By the time the Gold/Oil ratio hit 17:1 it started another deep crash, but this time the rato hit 44:1.  Today we are sitting at 23.58:1.  I would like to see a much deeper ratio like 30:1 before I turn super bullish again.

Besides the Gold/Oil ratio numbers the commercial traders are not very bullish as well. With the monthly chart above, crude oil is still under a death cross, including the weekly and daily charts. That alone should give pause to oil investors or traders.

This morning crude oil had a bit of a meltdown, which gives a bearish outlook a lot more credibility.

The world economies are slowing and oil demand may slow right along with it.

80% of the world still runs on fossil fuels and if we jumped, or are forced off its addiction, the world could not feed or heat itself. Don’t think electric cars will save the world as one huge solar flare can knock them out very quickly.

 

 

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April Crude Oil Daily Chart Review

If I was a conventional wave analyst like the majority I would turn this into a bullish wave count with little effort. Easy wave counting is for suckers that have nothing better to do but count every little micro mini wave structure which we need an electron scanning microscope to see. Most all my wave counts that I’m after are three-degree levels below Cycle degree and three-degree levels above Cycle degree. Besides that “All” commodities run with idealized diagonal patterns that few wave analysts use.

The bull market from 1999 to the 2008 peak is a prime example of how forcing a 3 wave bull market into a 5 wave bull market can keep us chasing our tails for decades.  Any crude oil wave counts only started in 1850 which is close to the Grand Supercycle degree wave 1-2. Before 1850 the world ran on whale oil until they were hunted to extinction. The majority do not realize that without this energy source our present world could have never been built.

In a few years time, you will never even see these intraday waves and we will never know if an expanded pattern actually happened. Besides that, all the Miniscule wave counting is worthless if we can’t see a big crash or big bull market coming.  They say you can’t time the markets and to some extent they are right, but any investment is only as good as it’s timing.  The 2016 low was another prime example as analysts were forecasting that lower oil prices were still to come. Yet crude oil bottomed at about the $28 price level and then started to soar. Next thing we know investors started to jump on the oil bandwagon as $100 oil forecasts started to become popular again.

I use the gold ratio frequently which gives strong hints when some asset class is too expensive or is to cheap when compared to the cash price of gold. The cheap ratio in 2016 hit 44:1 which is the most extreme ratio that I have ever recorded. I was bullish before oil hit a bottom until this ratio started to shift again. The magic expensive ratio number in the past hit 17:1 twice and oil turned and crashed each time. Today, and since January 2019, this ratio has been averaging just below 24:1. This April contract is sitting at 23.81:1 and for 2019 seems to be hitting the 24:1 Gold/Oil ratio brick wall.

As I post, oil is still heading higher just above the Fibonacci $55 price level and at the very least we should get a strong correction.  Oil is still under the sign of the Death Cross but found support at the 50-day MA for now. All it takes is some fake fundamental news to get published and all these bullish traders can turn into instant bears. The world is changing folks, where false news or propaganda and Artificial Intelligence (AI) brainwashing is becoming normal. What the movie “1984” showed us would be a Sunday picnic compared to what is already happening.

 

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WTI Crude Oil Update

This March 2019 contract created another spike to the upside which may not be finished just yet. Is the $54-$55 price level resistance. From the bottom, the bullish oil move looks more and more like a 5 wave run.  A 5 wave run that could be part of an expanded pattern never lasts, and eventually, the entire 2019 run should get retraced.  COT report is worthless information until the government shutdown is settled. I do have the Market Vane report still coming in every Tuesday, and it shows 40% bulls are present. 40% is not nearly enough to push a huge bull market, especially if the 24 month high was only 59% bulls.  Now if yesterdays reading was just 20-30% bulls then, I would have to look for a bigger bullish wave count.

The Gold/Oil ratio got a bit more expensive around 24.12:1 but old records make a Gold/Ratio of 17:1 extremely expensive. Incidentally the 25:1 ratio has been hit about 2 times since the 1999 bottom and both times huge bull markets developed. We also have established a new ratio benchmark since then, as 44:1 showed that crude oil was extremely cheap.

Demand for oil also changes with the seasons but any fundamental supply and demand readings are not trustworthy. It’s too easy for any oil player to manipulate, cheat and lie about numbers especially when the oil or gas is still in the ground. Opec is trying to pump up its take on oil because of the Aramco IPO slated for this year.

In Canada, we have the federal government trying to block all pipeline construction because our smiling Photo Bomb leader is trying to turn Canada into a European country.  Canada has wasted its oil opportunity blocking First Nations who want the jobs and economic benefits from higher paying jobs.  What you don’t hear or read about in the media is there are far more First Nations that want to work with oil and mining companies, rather than against them. Native controlled energy companies are out there and more are being formed.

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Crude Oil: Another Spike to the Upside!

 

Another crude oil spike this morning can be a sign that another correction is due or spikes can also be the end of the entire trend. It now looks like I have 5 waves up, which can be part of an expanded pattern. I kept the wave counts small but chances are good I may need to change it at a later date.  We could get a correction back down to the $49 price range but if crude oil travels.

Many times 5 waves like this make a run and we can get excited about another large leg up in oil. Many times we can get fooled especially in an expanded 5 waves.  A wild move that completely retraces the $42 price level will confirm that this move was just another bear market rally.  Going long at this point is a FOMO move and chances are good your bullish bet will get stopped out pretty quick.

The Gold/Ratio has also become more expensive as we are at 23.81:1 today. 17:1 will put us back to where oil would become extremely expensive again when compared to gold.  A large zigzag decline is not of the table but we will not know that for some time.  If the present Gold/Oil ratio stays the same for a few weeks then it could be hitting what I call the “Ratio Brickwall”

We also have a very convicing H&S being set-up at the $54-$55 price level so anything can still happen in the next few weeks.

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Crude Oil: Big Dip Or A Little Dip?

Crude oil created a bottom on January 1-2 and then proceeded to make a bullish run that has now turned into a correction. If this entire bullish move is just a bear market rally then crude oil should still crash to new record lows below that $42.50 price level.  A bearish rally will slice the bottom trend line in two, but this correction can be the 4th wave as well.  We might get support at the $49 price level which may take several weeks before we find out. None of the COT reports are working while the US government is shut down.

Even my Gold/Oil ratio has not changed any recently, as we are now at 25.46:1, from a January 2, 2019, reading of 28.77:1. If the reading jumped back to a 17:1 ratio, then I sure would be very bearish on oil.

Crude oil sure developed a nice H&S pattern and if it fails and oil goes higher we know that the bullish trend might be real, at least for another leg up.

There are so much hype and BS regarding oil that the fundamentals can change over-night depending who you listen to. Saudia Arabia with it’s planned IPO is trying to come clean with its reserves which have been kept a secret for decades. Nobody will know unless independent sources verify their claims of all this new oil they have been hiding!

 

 

 

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Crude Oil Bullish Review

So far oil has been having a very bullish January which started in December 2018. This February crude oil chart has now developed a very nice vertical spike to the upside. This is usually a setup for correction or the end of an entire bullish move. A correction and then a leg higher would add a 5th wave to this bullish phase but then oil is facing stiff resistance near the $55 price level. I’m biased to Fibonacci numbers and we are facing the 50-day MA which will also produce resistance. We have a long way to go with price and time before any Death Cross can happen.

We had a Gold/Oil ratio low of just under 30:1, but with this present rally kicking in we are not at a 25.17:1 ratio. Readings of 17:1 has caused an oil price crash several times already. We may never reach any 17:1 ratio this time, but gold/oil ratios could hit a brick wall just the same. The ratio could stall which I can’t see unless I check it several times per week. During November 2018 I had about 14 calculations.

Commercial traders are still net long with the government COT report being delayed due to the government shutdown. It’s kind of ironic when the government is shut down and the stock markets still go up. I’m still bullish on oil but I sure would not take a bullish position when the spike is visible.

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Crude Oil Daily Chart Update

This is the March oil contract month, which is a bit early to use but the end result will be the same. Yes, we hit a bottom, but we may still be a bit too early for another bullish move to crank up. There still may be a little upside to go and I’m taking a chance as one more downside move can also still happen.  The commercial hedgers are still net short crude oil which can keep a lid on oil prices. The speculators are the trend chasers and are building net short positions.

The Gold/Oil ratio tells us a different story as that ratio hit about 30:1 briefly in the last few weeks, but it is sitting at 28.25:1 right now.  44:1 was the last extreme bottom while 17:1 ended up being one of the extreme expensive ratios. Oil has crashed from this 17:1 ratio twice since the July 2008 peak.  Our present crude oil market is 6-7 months shy of a 10-year bear market, with no signs of an impending strong 5 wave run.

When we look at the crude oil monthly chart we can see a crash, then a huge rally and then another crash into the 2016 low. This would make a great looking zigzag crash which may not be finished.

It’s a game of splitting hairs and only short-term trades may work.  One thing is certain and that is if you are a crude oil follower for any reason then use the gold and oil price on a smartphone and calculate the gold/oil ratio several times a week. Using the little Forex gold and oil units works just as well. Making the calculations consistently about 2-3 times per week will get you started.  After a while, you will memorize the extremes and what can happen after extremes get hit.  Don’t try and forecast the price of gold this way as oil is not money, crude oil evaporates into thin air when it is burned but gold can’t be destroyed.

If some clown forecasts gold going to $5000 next year and our present gold/oil ratio is 28:1, then $5000 gold would produce a $178 oil price. Oil at $178 in 2019 is highly unlikely so you know that the gold price forecast is just a pipe dream!  At the 2008 oil peak, bullish oil price forecast was being made with $200-$300 oil prices still to come. All the experts were bullish on oil at that time, yet oil imploded from $147 down to $34 in just 8 months.  The Gold/Oil ratio was at 9:1 at that time and I knew that oil was going to crash.

The idea about gold ratios is that it gives us more of an objective look at the oil price and we can see through the emotions that are always present in any market.

 

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Crude Oil: Can It Find Support?

Since the September peak, oil has plunged to what some call a “Historic Move”. Oil has crashed many times before, so I don’t call this “Historic” at all.  So far oil has hit a bottom just a bit above $45.

I had mentioned that $45-$40 could be support, but support for what? A new bull market going to the moon? I doubt it, but I sure would like to see this rally to continue for the rest of the trading year. The commercial hedgers positions are still net long but the Gold/Oil ratio was 27.52:1 this morning. This is the cheapest Gold/Oil ratio registered all year and hopefully the year-end bottom is in.  We could be landing on a Minor degree bottom, from where we could expect a wild counter rally with a run back up to about $50-$55!

For those that have any doubts what a Death Cross can bring, you are seeing it now with this daily chart.  It would have to be a strong rally before a “Golden Cross” might form but even then oil may be for short of a “Golden Cross” situation.  I’m sure bearish traders are in a bear trap as well and that the “Buy” orders are piling up above present prices.

Yes, the oil fundamentals change like the wind with many analysts each finding a different reason why oil is crashing.  If the Gold/Oil ratio hits the 27:1 brick wall for any length of time then that would also be a bullish sign! Flying and driving this holiday season can make a difference but only time will help to confirm that.

On a quick note, yesterday we had a very powerful storm come in that took out my power for over 6 hrs so my updating was curtailed.  I will also take a break but will post a little to cover a few asset classes for year-end review.

Happy Holidays and Best Wishes 🙂

 

 

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Crude Oil Intraday Bounce Update

My last posting price bottom did not hold for very long, maybe this crude oil bottom will last a little longer. This is the March 2019 intraday chart which can have completely different wave patterns. I look for the next busiest month contract which might have a slightly different price. I think oil is in for a bigger bullish phase but that might happen next year. In more move up and another move down would help to complete this wave count, which are diagonal wave structures.

Yesterdays Market Vane Report showed only 35% bull present. This is low but not an extreme just yet. The gold/oil ratio is a bit more telling as it registered 26.44:1 this morning. This is a record Gold/Oil ratio, in all of 2018. Getting close to the year-end also helps.

The fundamentals have been distorted and change at a whim as it seems every producer around the world is trying to manipulate the price of oil back up by cutting production.

Our oil policy is so screwed up that our government has tried to kill off our oil industry which got Alberta mad as hell. Then Prime Minister Justin Trudeau throws $1.6 billion cash at Alberta. Our government has no respect for the tax burden on ordinary working folks while the government drops cash out of a helicopter. Alberta has the upper hand here as cutting production will also cut oil revenues going back to the government.

 

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Crude Oil Intraday Chart: Bears Still In Control!

This morning WTI crude oil hit  a bottom  of $47.84 after which it started a bit of a rally. Since the December peak crude oil has been grinding down with many overlapping waves that I can’t count as impulse waves, but they sure look like they can fit into diagonal waves.  If we just bottomed then another zigzag rally should happen. This rally has no speed limit to it, so it can take its sweet time if need be. The only thing oil can’t do is soar above my wave 2 in Minuette degree.

The Commercial hedger COT report still shows that they are net short by a wide margin which hints that a super bull market in oil is not about to materialize this morning. We are dealing with wave position “unknown” to us most of the time. Fundamentals are also unknown as every country around the world is fudging its own oil related numbers. This is all about the process of eliminating wave counts that just don’t work. I manged to get in a couple of short trades on the way down but hesitant to go long with anything but a very small position. Even this mornings bottom may not hold, so I will wait it out.

The Gold/Oil ratio has improved with this recent oil price drop, but can still get much better. The Gold/Oil ratio sits at 25.65:1 which is much better but still far from being extreme. We don’t have to hit a new extreme ratio, as hitting the “Ratio Brick Wall” will do the same thing.

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Crude Oil Intraday Gyrations Update

Are we having fun yet?  Trying to figure out where oil is going next is always a challenge but I sure don’t think that the bearish situation is completely finished just yet.  One clue is that the waves are still overlapping each other which are signs of a bearish rally still in effect.  Another thing worth mentioning is that crude oil is just below the Fibonacci number 55. This support could fail before my digital ink even dries, as a move up or even a bit above $55 could still happen.  I have to run two sets of wave counts for oil, but both of them can be the same for most of the trip.

The Gold/Oil ratio has improved a bit recently at 24:1. This is not nearly close enough to be considered extreme but it’s making progress.  The Gold/Oil ratio only got better during November and we will have to see if it is running into a price ratio brick wall.

I would turn very bullish if the commercials were in a net long position, but they are far from that which will keep oil prices from running away to the moon. The fundamentals in oil change so fast which makes them worthless as well.  Did fundamentals give you the confidence to short oil in early October 2018? The experts were calling for $100 oil at that time. The October 2018 peak was one of most lopsided trades in the world as everybody was leverage to the long side and that didn’t include any COT positions.

The crude oil Death Cross on the daily chart happened closer to the $65 range, and oil would have to rally for a very long time before it creates a Golden Cross.  All my futures contracts that I follow are shifting or have shifted, into the 2019 year.

 

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Crude Oil Daily Chart Crash Update

 

 

In the last few days, crude oil did create another record bottom low of about $49.41, after which crude oil soared and so far has created another bullish set of 5 waves.  As I post crude oil has created another higher low, and it will be important to see if it the crude oil price will hold. I would like to see a counter rally of some sort, but a rally lasting a bit longer than just a few days.

A crash this long and deep sure has the potential to be part of an “A” wave as another 5 waves down in Minor degree sure might have a hard time as there may not be enough room.  Even a zigzag decline can crash to new record lows but that remains to be seen.

At this time the record low has a Gold/Oil ratio of 24.18:1, which is getting cheaper but that doesn’t mean we are at an extreme just yet. A Gold/Oil ratio of 30:1 would be better, but if crude oil rallies in the short term, this ratio will start to compress again.

The storage and pipeline networks have seen some extreme fluctuations, which in the longer term, will distort any supply-demand picture that is forming. I don’t rely on supply-demand numbers as there is no honest reporting that we can count on. If we think we are getting honest numbers from, Russia, China, Iran or any other dictatorship then we are just fooling ourselves.

The last month of the year could put supply numbers in focus again as the holiday season could kick in driving and flying plans. Until the airport gets buried in snow and all flights get canceled.

 

 

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January Crude Oil Weekly Chart Update.

 

So far the oil crash has been un-eventfull, but analysts make it out like it’s the end of the world. The talking heads will always find a reason, “Why” oil or any asset has crashed because it’s their job!

The news is all about fundamentals, but fundamentals are always lagging indicators and change like the wind just as fast.

The fundamentals I find important is the COT (Commitment Of Traders)report, Market Vane Report, and the net long or net short positions of the traders. Right now, oil is just a bit above the 200-day MA.

Today the Gold/Oil ratio hit 22.41:1 which is the cheapest oil has been all year when we use gold as money.  At 22:1 this is not nearly extreme enough to expect a huge rally to bounce from, as 30: would start getting close to being oversold.

China Inventories Rise 416%

That is a big jump in inventory levels, but it’s more profitable to store oil at low prices as the smart traders that do that use big crude carriers as floating storage units. That usually happens near a big glut, which I don’t see just yet.

If by some odd chance that the world calls it an “Oil Glut”, then I know the oil bearish phase is over, and a new bullish phase will start. You may laugh about that, but its not rocket science folks. The first glut in late 1999 turned $10 priced oil into a $147 oil price by the 2008 peak. The experts went nuts in 2008 forecasting huge price gains still to come, but what really happened is the oil price reversed and crashed to about $34! During that same time, oil traveled from a Gold/Oil ratio of 25:1 to 9:1 in about 8 years.

Oil markets have always moved in the opposite directions than what the fundamentalists are telling us! All the squawking about $100-$300 oil just being around the corner has dried up!

The smallest move up in the price of oil can bring back any $100 price forecast very quick.

At the intraday scale, it sure looks like a potential expanded pattern is in progress, where some violent upside can still happen. I don’t think this decline is resolved, as another zigzag may yet develop but it’s still too early to tell.

 

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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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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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