Crashing Crude Oil Update!

In the last year or so we have seen oil crash and in the last day or so another crude oil price drop has made its presence known.  There are no daily trading limits in commodities and it is the main reason why oil has made such huge price dips.

The decline is not finished just yet as I expect more downside to come.  The Gold/Oil ratio is flashing and today the Gold/Oil ratio is the second cheapest ratio in two years.

The Gold/Oil ratio sits at 29.42 today matched only once in the last two years! This is a fast ratio move and I would like to see this ratio continue to spread in the short term.  I trade the Forex oil units and have made some small good short bets, but the Gold/Oil ratio is sending a signal that we may have to reverse all our bearish thoughts as we will end up in a crude oil bear trap sooner or later.

Gold soaring, oil crashing changes the Gold/Oil ratio quickly so if we ignore it we can find ourselves in a crude oil bear trap and won’t have a clue that it is happening.

Oil might have another small degree, 3-4-5 wave count, to play out, but after that, a bullish oil move could surprise us.

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Crude Oil Intraday Rally Update

Last week activity in the tanker wars has heated up as drone attacks and crude oil carriers get seized. All the fundamentals would suggest that the oil price is going to soar, yet crude oil crashed late Friday even after the seizure of the second oil tanker.

Attacking shipping just reduces the amount of oil available but it also reduces world trade with an impending recession.

At this time oil could still soar to $56.80 as another zigzag is playing out but a short “C” wave is also a possibility.  When I can count 7 waves then a diagonal wave is a high probability but it also complicates any wave count.

I have a Minor degree top but that may be too high of a degree at this time. I use the intraday oil chart to help set-up my Forex Oil Unit trades and have switched between long and short bets for the past week.

I like to bet short when I can because there are no daily trading limits so short bets can travel very fast. I’m constantly reviewing the daily and weekly charts looking for a better fit but at this time I have too many alternative counts to contend with.

We have to see what the rest of July will bring as I still favor the bearish trend.

The Gold/Oil ratio is a bit better but still nothing to get excited about. 25.5 is today’s reading and any numbers that get close to 30 would sure get it close to where crude oil would be cheap again.

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Crude Oil Intraday Crash Review

In the last few days, the oil chart has rolled over and the debate begins what the support price is going to be. When they speak of “Support” then those analysts are still in the bull market camp.  Of course, if this is all part of a bear market rally then we might not see support until below $50.  The world glut is coming (2020) and that does not justify the oil price to keep going to the moon.

I tried to knock down my degree but started to run out of degree levels so for now, I will keep it as a 5 wave decline in Minor degree.  We could get an ugly counter-rally “B” wave in this 5th wave, so I’m sure it will supply a bullish surprise when it comes.

The Gold/Oil ratio is about 24.31 so this ratio should spread if gold keeps going up and the oil price keeps heading south.

Oil has no daily trading limits which create violent swings, so a crash that may sound insane to the majority of oil players is pretty normal from my perspective.

A large number of bullish traders use protective sell stops which are all piled up below present prices. Many of them will get triggered and next thing you know the oil price is free-falling, like an elevator that broke its cables!

I think there is more to this oil downside than just a mere correction but again the market has to confirm it.

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Crude Oil Another Potential Top!

I stretched this intraday chart so we can see back to the last major peak. It’s pretty hard to accept that a bullish run like this can be just a bear market rally, but for diagonal waves, this is still pretty normal.

This oil 4th wave I may have just barely kissed my wave 1 in Minor degree, which is also very normal for diagonal waves.

At $61 oil has started a small correction and the depth of any impending oil decline could trash the $56 price level.

Just as fast as oil has roared up it can die screaming from a bear attack.  Futures are always leveraged and have no daily trading limits, which produce very violent moves.

The oil units in a Forex account are just as violent which I try to trade in when I can. Four oil units take a little less than $20 to own and there are no contracts to contend with.

When I see a near vertical move like oil has just made, then either we get a strong correction or oil plunges with no support!

I will never post long drawn out fundamentals as thousands of others are doing just that already.  A few years from now nobody will remember or know why oil  has crashed.

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Crude Oil New Intraday High!

Crude oil has now charged higher since my last update and there may be more upside left to go.  Even though oil has topped $60 it would have to go above $66 to help confirm my “B” wave bottom in Minor degree.

Today the Gold oil ratio sits at 23.5  which is a bit more expensive. This ratio should keep spreading but If oil stops before $66 then a potential 4 wave rally would be still alive.

Gold is still in a bullish phase as its pushing higher as well. If $1800 is stiff resistance then $1800/23.5 would give us a $76.59 oil price.  I have a new set of 5 waves to contend with and they are diagonal wave structures so wild corrective moves can surprise us at any time.

Pipeline bottlenecks and refineries blowing up all seem to create the fundamental fear that the news just loves to hype.

The recent earthquake in Calfornia doesn’t help anybody to calm down but it didn’t take them too long to blame the earthquakes on climate change!

 

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Crude Oil Intraday Rally Review

This is the September contract and I made some small adjustments to what is a diagonal wave pattern.  With the world being fundamentally bullish and oil is pointing up, then showing you a potentially bearish scenario is hard to understand.

I expected the June rally and it started to hit resistance at $60. Even with trade wars, oil tanker attacks, tanker confiscation and a host of other fundamental reasons, crude oil can still crash.  Just because shortages can spike the oil price at any time, does not mean a whole new bull market has started.

Every time there was a war in the Mideast during the 1990s, oil would spike from a $10 low to $40 and then back down to $10.

That was a 19-year bear market with a triangle in its “B” wave of Intermediate degree. Oil is presently in an 11-year bear market and it had a huge bullish phase until 2014-2015 after which it crashed to $28.

The Gold/Ratio is sitting at 24.2 which is a bit cheaper but it seems to be stuck on repeat as this ratio hasn’t moved much.

All commodities travel as diagonals and they have been doing this since the Little Ice Age. The 1890s DJIA pattern is so choppy it took me years to understand. This all change with the Roaring 20s as other investments took over.

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Crude Oil Daily Chart Crash Review

At the $60 crude oil price level a small H&S pattern was starting to take shape. The speed of the June rally was just too fast as a near vertical spike makes this a candidate for being a bear market rally.

Diagonal 4th wave rallies can explode and come back hard and travel much higher than expected but it’s quite normal for diagonal wave structures.

This oil rally can also fit into an expanded pattern so 100% retracement could happen.

I  never try to put alternate wave counts up in the same chart but I switch back and forth until a wave count sticks longer than normal. I may have to lower my 5 waves in Minor degree down to a diagonal 5 waves in Minute degree but for now, this will do.

The Gold/Oil ratio is at 24.7 but I would like that to expand much further.

The action may be in the pipeline battles with refineries blowing up and pipelines getting old!

Have A Great July 4th America!

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Crude Oil Intraday Mini Crash Review

Late Friday crude oil took a sudden dip which I was expecting but didn’t know exactly when. So far June has been a good month for oil, but a correction seems to be underway.

I would like to see oil drop a few more dollars which could take until after the July holiday celebrations are done with.

Summer driving is around the corner and ICE vehicles will get you where you are going much faster than electric cars will.

Of course, if your battery pack doesn’t blow up first!  EV’s are supposed to replace “ICE” cars or “internal combustion engines” transportation, then why do they need to subsidize electric cars?

I call them “corrections” if I feel that another leg up can happen. Any 5th wave can extend dramatically and once it’s finished, I’m sure a spike will develop on the daily and weekly charts.

A price drop to $57 is what I would like to see, then the $66 price level would be my final price target. So far the waves are good looking impulse waves and they alternated from the choppy “A” wave very well.

Fossil fuels deliver and harvest 80% of all our food so without crude oil it wouldn’t take long before millions would starve to death.

 

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Crude Oil Daily Chart Update!

This is the September crude oil contract which shows the June crash very well. Now we are faced with a much stronger rally than expected which always calls for an instant review, and look for a better fit.

Today oil is producing another spike to the upside so a correction should be due if this “C” wave bull market has another leg to go.  Any correction can take oil prices back down to the $57 price level before it starts to crank up again.

You can find many fundamental reasons why oil is in a rally but I a few months from now no one will remember any of the fundamentals.  Fear as a motivator is the oldest trick in the book but fear usually, does not last that long.

Commercials are short oil but not by a large amount. The COT reports come out on Friday and we’ll find out if the commercials increased their bearish bets.

The Gold/Oil ratio is 23.48 and with 10 recorded ratios for the month of June, it is the most expensive so far.

At the $66 price level oil would be at a double top and “Truncated” or shorter than a normal looking zigzag.

The June crash is a flat wave pattern because there was a little single zigzag that started out the crash. 3-3-5 is a flat no matter how long the 5 waves decline for.

 

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Crude Oil Intraday Bullish Review

Crude oil has now traveled further than what I would like to see for a bear rally so I have to explore the bullish alternative.

I’m starting wave 1-2 in  Minute degree and the waves do look a bit short at this time. We also know that when it comes to extensions the 5th wave can perform miracles in any commodity.

A very important high would be at the $66 price level which would also produce another double top.

The Gold/Oil ratio is 24.3 which has not changed all that much.

I will keep this short for now as I have to review the daily chart as well.

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Crude Oil Intraday Correction?

During the night crude oil started a reversal and the only question is, is it a simple bull market correction or will the entire move in June be retraced?   Only time will tell but the rally does look like a zigzag so I will remain bearish but be vigilante if a bear trap is shaping up.  Gold is still in a rally but oil crashing makes oil become cheaper or cause gold to crash, as any Gold/Oil ratio will adjust itself.

On the daily charts, the 200-day MA has just produced a very small death cross so oil would have to do some fancy footwork to avoid a full-blown death cross.

There are no daily limits in all of the futures contracts I follow which means violent swings can always happen, and if your short oil then you may see some “green” in your oil short positions.

I have a small Forex account where I trade 5-10 oil units depending on how much confidence I have to the downside.

The Gold/Oil ratio is about 24:1 and sooner or later this ratio has to shift making oil cheaper if oil keeps crashing in price.  Sooner or later the Gold/Oil ratio will bring the gold price down as well.

If gold blasts up to say $1511,  in a fit of panic, then the Gold/Oil ratio could hit a 62:1 ratio.  Gold can move $100-$200 easily but I have never seen or recorded any ratio spread that a 62:1 ratio would bring.

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Crude Oil Intraday Rally Update

As much as I would love to remain bullish with oil, a very sharp spike is also taking place. Oil got to $57.40 this morning and there may be a little more upside still to play out.

I’m sure the rest of the planet of oil speculators wouldn’t dare short oil at this point, because they work on fundamentals which is news. News about some tanker/drone attack and the price of oil goes berserk. Does that mean that oil is in a new bull market? I doubt it, as all this has happened before back in the 1990s.

In those days they had multiple wars driving the price of oil, but in the long run oil still crashed to $10 by 1999. I love to short or sell when I have a vertical move, as they can usher in a big correction or the end of a bullish phase. If oil still charges to $60 then this would be smack dab inside my previous 2nd wave of one lesser degree.

The Gold/Ratio has changed little as it still around 24! I will be rounding down or up my Gold/Ratios. Every time I post a ratio I also enter it in a small log book and in June I went overboard as I recorded 8 Gold/Oil ratios already.

I will give the oil postings a rest unless some unexpected dramatic news comes out.

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Crude Oil Another Intraday Look

As much as I would love to be bullish on oil especially when a potential golden cross is going to kick in. The June 13 bottom has now created an inverse zigzag which is a small bear market rally.

During all of June, we had a sideways market that sure looks like a triangle. Triangles happen in “4th” waves and “B” waves.

Just as fast as this golden crossing kissed it can also turn right back into a death cross!  Everybody is waiting for “Fundamental News” that might send crude oil soaring. Traders or investors can get very emotional during any news release which can send the markets down just as easily.

I trade the WTI Forex units and tried short positions several times this year so I cry a lot if I miss another shorting opportunity. I’m not just after any move as I look for any potential 5 wave sequences I can ride up or down.

If a potential move has a 50/50 chance then I only take small positions or be prepared to bail out fast.

The Gold/Oil ratio is around 24:1 which I would like to see expand some more.  I may have to wait until the weekend before I post another oil wave count.

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Crude Oil Intraday Impending Golden Cross?

Most of my intraday charts are at the 90 min scales with 500 bars. I like to use the same settings all the time which helps to stabilize the charts.  At the top which I think is wave 2 in Minor degree, the death cross developed and the rest is now history.  After every death cross comes a golden cross, so it would not take much of a price rally, before oil would be back in a golden cross situation.

The trend line I have will not hold and when it breaks out then it gives me a clue that one higher degree is still in play. The $55 price level would be the first price target, but the entire rally can go much further.

Even now I can draw a bullish wedge which is also very bullish at least in the short term.

The Gold/Oil ratio has not changed all that much and is around 25.7 and hitting the ratio brick wall. Oil crashed from a ratio of 20:1 so a 25:1 ratio is not all that cheap just yet.

Hopefully, we’ll know by the end of the week if another little bullish phase is in effect.

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Crude Oil Intraday Tanker Attack!

In the last 6-7 days, crude oil has created a double bottom followed by price surge due to some tanker attacks bound for Asia. Events like this happen but rarely do they spawn a complete bull market.

Crude oil can keep going but it should reach the top trend line before I turn bearish again.  I use oil futures to help set-up a Forex oil unit position. I like to make short bets as taking a strong long position can get us into a trap.  If a single oil short shows “Red” in my account then I get out and wait for a better bearish set-up.

Oil is in a bigger bearish phase than what we think but oil traders jump on a bullish move chasing the price.

Right now oil may be bullish for all of June as there is the potential of a 4th wave counter rally still to complete.

 

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Crude Oil Intraday Update And Impending Golden Cross!

With this December intraday chart, we can see that crude oil already had a death cross at the $61 price level. Crossings happen more frequently at this intraday level and another crude oil bullish phase would be a set-up for a golden cross.

There is room for oil to rally again, right to the top trend line at the $56.50 price level.  Another leg up sure could force a golden cross in oil to happen.  The problem with moving averages is that they are useless after they happen.

Any summer rally at this point sure could produce a golden cross but then another new set-up for another death cross can also happen.

I use crude oil futures as a set-up for trading Forex oil units so this morning I closed off any short positions I had in Brent and WTI oil. I sure can be wrong so I only take very small bullish positions where it is easy to bail out just in case no rally takes place at all.

Any price spike with a vertical move would force me to close any short term bullish positions, but if the bullish phase comes true then I would be building a new short position.

Another bullish move could take all of June to play out and surprise moves should be expected.

The Gold/Oil ratio has improved with a reading of 25.40:1 this morning and I want that spread to keep getting wider.

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Crude Oil Intraday Update

This is the September crude oil contract and the more I stare at it the better I like oil as a 4th wave expanded flat rally.  Chances are good that next week this rally could end and oil should resume its bearish trend.

That means that this oil rally is just another bear market rally even though it’s a small one. It takes very little upside for crude oil fans to turn bullish again but from my perspective, we could be facing a much bigger and longer bearish trend than we can imagine at this time.

Some analysts keep saying that oil is close to a bear market but this is a very narrow point of view. The real bull market in oil died in July 2008, with every rally since then being completely retraced.

Since 2008 oil had two major crashes followed by bullish phases. Analysts were convinced both times the crude oil would soar to the moon again but oil turned around and headed south each time.

The 2016 oil low may be the end to the oil bear market but the rally that followed sure has some impulse pattern issues.

The Gold/Oil ratio is about 24:1 which should expand some more as the price of oil declines.

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Crude Oil Intraday Chart Update

Crude oil hit a bottom 2 days ago and is still above $52.17 so far. What I’m expecting is a longer and higher correction which may take oil back up to the $55 price level. Two days is also not long enough for a Minor degree correction to complete which could take until mid next week.

As long as the waves are choppy and overlap then the odds are good that oil prices will not soar to the moon.

So far the decline looks diagonal and the 50-day MA could get sliced while the 200-day MA should over resistance.

With the price of gold blasting upward the gold/oil ratio changed just as fast but it’s still around 24:1. We want that ratio to spread as gold becomes cheaper during this bearish phase.

I think this oil bear party is far from over until most of the oil bulls get butchered or we see then running for the hills.

 

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Crude Oil Daily Chart Review

One thing we can trust oil to do is to go in the opposite direction when the oil bulls call for oil to go much higher.  When the oil media calls for higher oil prices, then I ask a silly question, “Who are they talking to?”  What group of smart investors or traders are still lurking in a cave somewhere that just loves to buy oil at much higher prices?

How oil has crashed so far shows us that it was the bears hiding in the forests that came out and decimated the oil bulls, at least for now!

I will not repeat all the fundamental news for you as we can have a thousand reasons put out by 1000 different blogs.

No trend lasts forever and how much they retrace down to gives us an idea if we are in a bear market rally or a true bull market.

In the chart above between the “B” wave bottom and “C” wave top in Minor degree, we want to know if it is a bear market rally or not. We are at about a 50% retracement right now, but that does little as we can also get 80% plunges.

Nothing but a complete retracement clearly visible on daily charts would have to happen, after which the early 2019 bullish rally is a bear market rally.

The most expensive Gold/Oil ratio hit about 19:1, after Fridays oil price thrashing the ratio ended at about 24:1. This was a quick jump in the ratio and we may be ready for a counter-rally in June.

Of course, we could see a very violent counter rally and it to must be a fake bullish phase if the oil bearish phase has not completed.

Oil has been in a bear market since the 2008 peak, where every counter rally since then has already been retraced. Since the July 2008, peak oil produced two major lows which would work for a normal correction but in an 11-year bear market, 3 major bottoms can also happen.

11 years sounds like a solar cycle to me, which I call a fundamental indicator that most wave analysts ignore.

Even though the overall decline needs to go much deeper there are no daily trading limits in commodities, that I know about. You can’t get a more vertical drop than what was produced on Friday so the bears could be in a short term bear trap. I closed off all short positions in Forex Oil units on Friday and even took a small long position.

The moving average lines will get pulled down until another oil death cross is formed.

 

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Crude Oil Intraday Crash Update

Crude oil gave us a short bullish move before oil reversed and plunged to a new bearish low.  Oil has completed 2 sets of zigzags and we need two more and maybe a third, which could turn into a flat.

Another $5-$6 drops would be nice and then oil would be ready for a wave 3-4 rally in Minor degree.  These diagonal waves can make spectacular moves when there are no daily trading limits.

I would love to see another small 5 waves down in Minuette degree before another potential counter rally can kill the bears and send them running back into the forest!

They’ll be back and that should coincide with my 5th wave down in Minor degree.

The Gold/Oil ratio definitely got better but at 22.8:1, it’s still not enough to jump up and down about.  I do have some WTI short positions and so far the trade is in the green.

All this can fall apart if the “B” wave in Intermediate degree is too far off base. It may take until November/December before this, “Run of Five” gets completed.

When the “B” wave disappears on this 90 min chart then the wave 2 in Minor degree will be the main position I’ll be counting from.

The problem is that any “E” wave bottom in Primary degree could be below the $26 price level which is about $30 away from today’s price low. For that to come true some serious extensions would have to help it otherwise oil could come to a grinding halt much earlier.

During this 90 min chart, we had a golden cross and then right back into a death cross. With the daily chart, it will not take long for the 50-day MA to slice through the 200-day MA.

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Crude Oil Crash Intraday Update

This is the December 2019 contract.  During May the counter rally had many analysts forecasting the return of the bull but instead the oil bears came out out and decided to shred oil bulls which produced about a $6 price crash.

Since the April top I believe a diagonal decline is a high possability and started the count to help confirm it.

I have 2 zigzags in a row so that rules out any flat at this time, but it also means crude oil can come back and dip well into the previous wave 2 of the same degree. This would be close to the $62 price level and must not exceed above May 2019 highs. ($63.25)

The big test is yet to come so we have to see if any rally continues to be choppy or even go sideways for the rest of the month.

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Intraday Crude Oil Rally Update

This crude oil rally in the month of May looks like an inverted zigzag and can work as a bear market rally. Diagonal waves do make wild moves and can confuse us by breaking out to a new record high.

In a true blue bear market rally, this chart cannot push to a new high past that April peak of $64.89, otherwise we have to assume that the bull market had not completed in April.

In the next week or two oil should give us a better picture, but I sure would like to see oil breakout of this short term sideways market.

The Gold/Oil ratio hasn’t changed that much as at 20.30:1 the Gold/Oil ratio number is still hitting a brick wall which started in the first part of April 2019.

I will not repeat or entertain the reams of fundamental data being continuously spewed out, as it’s impossible for me to compete.

Fear of war can drive prices, but fear moves are highly overrated as they rarely last very long. Fear of war also happened in the first Gulf war so our present situation is not that much different.

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Crude Oil

It’s now obvious that crude oil has started to back off or decline.  What shape this decline is going to be is unknown but a bullish correction can retrace by about 60% of the entire bullish move. Many times we can just eyeball it to give us a quick look which looks like it could be at about the $53-$55 price level.

We do have a little spike forming already but crude oil will have to produce a much bigger spike before I’m convinced that crude oil is going to soar to the moon.

Crude oil is the commodity that is destroying the world yet it supplies about 80 percent of all the food we eat at our dinner tables. The war on fossil fuels seems to have picked up lately as some countries are on the verge of declaring a “Climate Change Emergency”.

I’m sure declaring any “Climate Change Emergency” in your local area will keep the tourist away for a long time. That’s just like yelling “Shark” at the beach during spring break! I guess the countries that are yelling, “Climate Change Emergency”, have never watched “Jaws”!

For now, the commercial hedgers do not paint a bullish scenario as they are still net short by a large amount. Until I see some of these numbers reverse I have to keep looking for a bearish wave count.

The Gold/Oil ratio improved lately but at 21:1 crude oil is far from being cheap, so wild fluctuations can keep any oil bears on his toes.

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Quick Crude Oil Intraday Update

Late last month oil soared to a new record high after which crude oil started to decline and turn bearish.  Sure we can just work another correction but to be blunt it’s still far too early to tell.  Comparing this June contract top to the December intraday top, we have a different wave count. What else is new as that happens often enough!

This June contract will disappear but for now, we have more than a month before this contract expires.

For now, I will work oil as a potential 5 wave sequence until It gets destroyed or no longer works. I trade oil with the Forex oil units and they make these futures contracts look pretty docile. I’m expecting a much bigger dip as this bearish phase could be just getting warmed up!

Oil hasen’t moved enough to make any big Gold/Oil ratio changes but the COT report tonight may give us a bit more insight.

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Crude Oil Weekly Chart Impending Correction Review?

This is the June 2019 contract where oil has just crossed the 50-day MA line which should give us some resistance. Crude oil shows a golden cross has formed in 2018, but it happened about 26 months after the 2016 bottom.

Crude oil would have to keep soaring to avoid a death cross from forming. Crude oil would have to crash well below $51  for the 50-day MA to cross the 200-day MA again. The $51 price level is also very close to a 60% correction so anything can still happen.

Commercial hedgers do not support the bullish herd, so its just a matter of time before oil will show us a correction or a crash that can take oil down to the previous support at the $45-$44 price level.

A complete retracement of the 2019 oil rally, would confirm that the 2019 move was just a bear rally. I’m looking at oil from a triangle perspective but could abandon that idea if a huge spike to the downside were to develop.

I track the gold/oil ratio and might make 3-4 calculations every month while in April I made about 6 calculations. All of April the Gold/Oil ratio averaged between 19-20:1 which is the most expensive readings I show since November 2018, about 6 months ago.

The 20:1 ratio seems to be a Gold/Oil ratio price brick wall which should start to spread again, once oil decides that this run has gone far enough.

The global warming alarmists should be jumping for joy that we have high gas prices at the pumps. Right?  Well, it’s not rocketed science folks but talking to local retail gas station staff, the feedback is people are not happy campers when in BC we could have one of the highest pump prices in the world.

The blame game continues as our fearless Prime Minister is blaming high gas prices on our BC government!

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Crude Oil Intraday Triple Top!

For the last 3-4 days, WTI crude oil ran into the $64.70 price level about 4 times since the December 2018 bottom. The entire 2019 bullish phase has been choppy and seems to have a slight  “Wedge” shape to it.

Crude oil could still turn into a triangle and we would be heading down to an “E” wave if that was the case.  $63.20 could be a bullish support price level but if the bigger bearish picture is true then $63.20 would just offer temporary support.  One day crude oil can soar and then the next day oil can drop like a rock.  Crude oil has been moving to the point where the analysts are having a tough time trying to figure out the real trend.

Just because some asset class is going up does not mean it automatically is in a new bull market.  Big bear market rallies can do exactly that but to confirm this, crude oil would have to crash well below the $44 price level.  We could have a long wait before that happens.

There are no daily limits on crude oil moves, so when it starts to act bearish it can move with stunning speed and price distance traveled.

The 2008 crash is a prime example of how fast prices can move.

 

The commercials are still net short by a wide margin which tells me the commercial hedgers have a bearish outlook which makes chasing a big bullish wave count a futile endeavor at this stage of the game.

The Crude/Oil ratio sits a bit above 20:1  which it has done only twice in 2019 and all in April.  I call this “Hitting a Gold/Oil price ratio brick wall”. At a 17:1 ratio,  oil has had no problem in crashing in the past but the ratio could still get worse in the short term.

Canada is a prime example of how the “War” on oil is being executed by forcing the “Carbon” tax onto the provinces that don’t want it. Here in BC, we had a big price jump at the pumps which will drive people across the border to get cheap US gas. My friends that drive to work are not happy campers and I’m sure higher gas taxes at the pumps does not increase the demand.

80%  of the world runs on fossil fuels just to keep the lights on, its more like keeping the Internet up and running. 5G and Bitcoin mining requires huge amounts of electricity that solar power can never supply.

 

 

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Crude Oil Daily Chart Bullish Action Review

The fundamentals regarding crude oil changes as fast as the wind, besides that I bet there isn’t a single analyst that knows what fundamental news made oil rise into last year, and then crash and burn into early 2019.  I sure don’t know as well but the gold/oil ratio sure gave me a clue that it was going to happen.  Even though satellite spying is extremely sophisticated as they can track the floating roofs on storage tanks.

The US has been accused of refined oil product contamination which happened recently in South Korea,  to where they refused shipments.  Of course, they just turned that oil around and sold it to China.

Beside that most fundamentals regarding oil supply and demand can be just pure false news to keep enemies guessing. In today’s world, it is very easy to manipulate the news, so unless you have a Bull Shit Detector App on your smartphone we will never know the facts.

Even though wave counts can be pretty foggy most of the time they still over more “Truth” than fundamental news does.

Yes, oil can go higher but we are at a 20.98:1 Gold/Oil ratio which is the most expensive it’s been since November 2018 when it was at 17.37:1.

Oil seems to love crashing at around 17:1 which it did in the 2014 decline.

Math doesn’t lie only people do, so any gold/oil ratio can supply more objectivity in a world filled with fake news. “Fake News” and “Propaganda” is the same thing, so its not rocket science to see which countries use the most propaganda.

The commercial hedger’s net short positions make the potential for a big bullish move very unlikely, as open interest is also hitting record lows.

There are “No” daily trading limits in crude oil so that does produce some very long free falling type moves. Traders will be piling on the protective sell stops and once they get triggered, there are no daily limits to slow it down.

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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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