Crude Oil Monthly Chart Death Cross Review

Crude oil follows the Idealized diagonal wave patterns which are mostly zigzags connected together and count out with a 7 wave count.

To put it bluntly diagonals can count out with, A,B,C,D,E, or  (ABC1,ABC2,ABC3,ABC4,ABC5) and or W,X,Y,X,Z.  They are all the same patterns and the only difference is where they are found.  Waves 1,3 and 5 can be zigzags and wave 2 and wave 4 can be flats, triangles or complex zigzags.

The history of oil only started in the 1840s. From 1980 to 1999 there was a Triangle inside a “B” wave, followed by a bull market where I now only see 7 waves. All other expert wave analysts saw 5 waves but the 5th wave was far too small so they forced a Primary degree 5th wave into the pattern.

Forcing a wave count will never work, and believe me I tried as well as I got sucked into believing that 1999 was a Cycle degree 4th wave low!

Many good contrarians saw the 2008 oil crash coming and never believed in the “Peak Oil” bullshit. Obviously, history has confirmed the Peak Oil BS, and about 8 months later crude oil was in another world glut!

The Gold/Oil ratio in 2008 was 9:1 and oil only had one option and that was to crash. By early 2009 this ratio stood at about 25:1. Oil rallied from a real-world glut as the experts were looking for lower and lower oil prices. Expert fundamental analysts missed most of the major important turnings. By the time the Gold/Oil ratio hit 17:1 it started another deep crash, but this time the rato hit 44:1.  Today we are sitting at 23.58:1.  I would like to see a much deeper ratio like 30:1 before I turn super bullish again.

Besides the Gold/Oil ratio numbers the commercial traders are not very bullish as well. With the monthly chart above, crude oil is still under a death cross, including the weekly and daily charts. That alone should give pause to oil investors or traders.

This morning crude oil had a bit of a meltdown, which gives a bearish outlook a lot more credibility.

The world economies are slowing and oil demand may slow right along with it.

80% of the world still runs on fossil fuels and if we jumped, or are forced off its addiction, the world could not feed or heat itself. Don’t think electric cars will save the world as one huge solar flare can knock them out very quickly.

 

 

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