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.