Crude Oil 2012-2018 Weekly Chart Review

 

 

This is just a quick update for an alternate wave count that I have for this wild crude oil bull market that has been going since the 2016 bottom. 2 years and 10 months crude oil is in now in a downturn. No doubt about it crude oil was a wild ride, which topped on Oct 1, 2018, at about $76.90 with this December contract. The Gold/Oil ratio has been at an extreme with a 17.61:1 reading this morning. The 17:1 average reading lately is a far cry from the 44:1 ratio I recorded at 2016, $28 low.

Even then expert analysts were calling for $20 and even $10 oil still to come, as the world was in a huge world oil glut. Do you remember exactly what triggered oil to soar in a world glut? Nobody will give you a good answer as they don’t remember!  I knew at that time that the oil bottom was near just like it has done in every other major world oil glut we ever had!  2008 was also a world oil glut when crude oil hit about $34 and the ratio at that time was only 25:1. Markets do the exact opposite of what fundamentals always suggest, as fundamentals will always tell us the wrong things at the extremes.

We are at an extreme as commercials have a huge net short position, while the speculators have built a huge net long position. One group has to be wrong, and my bet it’s always the speculators that get into a trap.  My Tuesdays Market Vane report didn’t show any real extremes, but they sure do with RBOB gasoline and heating oils.

For now, a potential “D” wave could have finished. There is so little difference in mood between a bull market wave “1”, “B” and “D” wave that no expert can tell the difference.

In the long run, we should get a good corrective wave to show itself. Except for the “D” and “B” wave tops. Any wave 2 must not crash to a new record low.

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