Crude Oil 1999-2019 Review

I constantly review the bigger picture, as I see it everything related to commodities are diagonal wave structures. The 1990s was a correction with a triangle in the “B” wave of Intermediate degree ending in 1999.

Then in the middle of a worldwide oil glut crude oil started to soar until peak oil ended in 2008. Most of all wave analysts count 1999-2008 as a set of 5 waves in Primary degree, yet I count 7 waves.  Forcing 5 waves when there are only 7 waves is what I try and avoid.

During the 2008 peak, the Gold/Oil Ratio hit 9:1 when crude oil started to crash. Many smart contrarians knew that oil was going to crash, just because of the ratio was at an extreme.

I called the crash as well except my wave degree levels were off by a long shot.  From 2008 to the 2016 bottom looks like a perfect Primary degree zigzag has completed, which also ended with a potential 4th wave in Cycle degree.

Another zigzag in Primary degree could be one of the options that will end with Cycle degree wave 5. Wave 1 in Intermediate degree may already be completed but in the short term, oil can be fooling us as wave 2 might not be finished just yet.

The drone attack produced a crazy move to $63, a few dollars shy of what I thought it would do, but in its wake oil also produced one “Humungous gap”.

It was about a $4 gap between $56 and $60, so crude oil can crash right back down to $56 with little problem. (or lower)

I have never noticed a gap in oil this large since I started wave counting oil. This is a very bearish signal.

There should be no panic as they say the drone attacks was just 5% of world oil production taken offline. This made the USA the largest exporter of oil for the short term.

The Gold/Oil ratio also compressed to 24.9 from Fridays ratio of 27.13. Oil refineries blow up regularly but they can also rebuild them very fast by working 24/7.

Only time can answer a few more questions, as we have to see how deep oil prices can still fall.  Any oil price fall below $45 will definitely kill this short term wave count.

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