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.