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.