As I post crude oil is still heading higher but I think it will run out of steam again if the bigger bearish picture is real. The Gold/Oil ratio is above 21:1 already and we should see this ratio expanded if this bearish phase keeps going. Sure, it’s nice to start counting a 5 wave sequence heading down, but we will still get very violent counter rallies. It still may take some time for the patterns to smooth out a bit, but I think the bigger trend is down. The December 2018 crude oil contract is about $2.47 US lower per barrel than this June 2018 contract, which is kicking the stuffing out of the bull market.
Even most of the commercial traders are against the continuation of the oil bull market. With the present day gold price and a potential 30:1 Gold/Oil ratio, it could bring oil down to the $44 price level. That is a purely speculative oil price as the $40 price level can work as natural support, even if it may only be on a short term basis.
The big impressive wedge in oil prices I have talked about and drawn out, gives us a heads up already that a huge bullish phase can explode once the wedge sees bottom trend line contact.
The wave 4 top in Intermediate degree is telling readers that my oil wave count has already passed a Cycle degree peak back in early 2008. Since that top crude oil has been in a bear market that hasn’t finished and might end up lasting 13 years before another major reversal in oil will happen.
The trade war seems to be picking up again so fear will always be dominate in the oil market.