Tag Archives: Crude Oil
Crude Oil Intraday Crash Update.
Since the peak last month nothing that has happened indicates a correction has taken place except for small counter rallies. (Mini bear market rallies) We have to understand any bear market rally is they will determine if we should hold a bullish position or get the hell out. There is nothing more horrifying than think about a bull market that some say is going to $300, but it turns and crashes to $40 or even lower. Bear market rallies in any degree always retrace themselves, so there is no sense in staying, as bear market rallies make for excelent short bets. The trick is spotting a bear market rally before all others do and I will keep trying to do that as we all need that information early.
Most of the oil bulls do not understand the concept of a bear market rally as they treat anything that goes up as a real bull market. In commodaties and oil specifically is in a big Cycle degree wave 4 bear market, with most of them being giant zigzags. It may take the rest of the summer to play out so expect some wild counter rallies like we just had.
I switched mywave count to another wave 1-2 in Minute degree but ultimatley we need 5 waves down in Minor degree or one zigzag in Minor degree. Any zigzag could form where the “B”wave looks just like another 4th wave rally. These types of rallies would be very hard to spot if we’re not looking for them. All this trade war rhetoric is just to much for the oil bulls to handle. Maybe $50 billion worth of duties, the markets could handle, but $200 billion, was just too much.
Fear drives the commodities, not some logical fundamental explanation why oil is going up or down. Sure I can see another world oil glut coming up, but we know that oil gluts are very bullish for the price of oil. The last record oil bear market low was about $28, which technically should be breached again, if the 4th wave peak is on its true location.
My wave counts may make little sense to some, but my oil wave count starts with the 2008 peak. This makes the oil bear market about 10 years old so far. Thinking in 4-5-month steps, we could see September/October with another new record low. I may be very bearish on oil, but I assure you I will turn very bullish after this 5th wave plays out.
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Crude Oil Intraday Crash Update
Since late last night oil topped after which it produced a great swan dive. Any asset class that was this choppy can always have a counting issue and therefore go higher than expected, but only time will tell if this crude oil counter rally is finished. A move where crude oil falls below $64 will settle that argument, as bear market rallies are always completely retraced. The story that Europe is awash with crude oil was interesting. They say, “It’s an unusual occurrence”. Europe is just hedging their bets on buying cheap US crude and not relying on Russian or mideast oil. It’s the perception of excess oil (glut) that can turn oil bulls into oil bears instantly.
We are going to get many more of these fake bullish moves, and each one will produce excitment thinking the worst is over for the oil correction. In the eyes of the public anything that goes up is in a bull market, but from an Elliott Wave perspective we can have very large bear market rallies. My big bear market wave count starts way back with the 2008 peak, as we must never lose focus from where this WTI crude oil wave count comes from. I’m sure we will see another counter rally in the next few trading days, but if the rally is finished, then no new highs should get established.
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Crude Oil Intraday Topping Pattern Review
This morning crude oil created another higher high. There can always be another spike higher but this rally sure looks like it is fighting the bigger trend. Over lapping wave structures is the first clue, and a wedge is another. You usually don’t get one without the other as most bear market rallies can turn into wedges. The “C” wave part is all diagonal as it started near the bottom. The only way we can see these small zigzags is with a 30 minute scale chart. Anything bigger and you would not see many of these small zigzags.
The wedge looks impressive but we can dream up wedges just about anywhere if we are very biased. I believe there is more downside to come this summer so jumping on the oil bandwagon could overload it at a time, when the wheels are ready to fall of.
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Crude Oil Intraday Bullish Update
Crude oil has been in a rally but this rally is so choppy that oil looks like it still is in a counter trend rally. We may still have more upside but this rally should end and then resume its bigger bearish phase. The December contract is still $1.21 lower than the June contract and over time I would expect that to change which could still take many months to switch. The December contract is also very busy so I may switch to the December contract soon.
Panics happen when a small group sees the same thing at the same time, and any unexpected inventory number can do that. Markets will always do the opposite of what ever trend the majority have established, as the majority can never win at this game. The majority never practice buying low and then selling high becuase they only love it when things go up. If not enough bulls keep buying then sooner or later this crude oil bullish phase will have a hardtime in staying with this northerly direction.
Those traders that can play both ways care little about fundamentals as they only care of what their TA is telling them. On a short scale we could also be facing an inverted wedge which is also very bearish. Overall I remain bearish until a correction completes that will push oil into a new bull market phase. So far this idea is pretty remote but by the fall the bearish phase will show itself to more participants.
I see the $40-$45 price level as a good resting spot but if any rally is still choppy, then even the $40 price level will not hold.
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Crude Oil Trade War Update.
Crude oil is on the verge of crashing through short term price support. The gloves are coming off, in the war on trade as they all try and fight back. All this trade war talk does it make you want to jump out and buy commodities? My bearish stance on oil has not changed one bit even though there are many experts out that are still beating the bullish “oil drums”. All the price forecasting in the world will not come true, if we don’t know the difference between a real bull market and a big bear market rally.
Recently they got worried that inventory levels have decreased , and then no sooner did they post the news, another report comes out saying the exact opposite. I’m not concerned about any crude oil inventory levels as the big crude oil traders will buy, build or rent more storage space that prying eyes cannot see. Traders don’t make money storing high priced oil, they make money storing low priced oil waiting for a price rebound. In South Africa there is a big crude oil depot that has huge storage capacity by going deep below ground. More daily oil flows around South Africa than what travels through the Suez Canal so Cape Town is a prime location for a major world storage hub.
Another oil storage trick is to rent large crude carriers and just float them until prices improve. Some of these VLCC (Very Large Crude Carriers ) can hold 2 million barrels. (About 2000 contracts) I’m sure that floating storage will come into play again in the next few years, and when it does it will be all over the oil news blogs. When all the oil storage is used up then the price of oil will rally. There is no real shortage in oil to justify lofty expert price claims, as they have failed every time. In 2008 they were calling for $200 oil but oil then crashed to $34! We may get a brief halt in the crashing oil price, but that may not happen until crude oil gets close to the $40-$45 price level.
When commodities crash they can do so, with amazing speed, and that famous excuse, “It’s Different this time” will not stop an oil crash.
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Crude Oil Intraday Rally Update
In the last 3-4 days crude oil has been in a small rally which sure has the pattern of a triangle. We are just finishing what looks like another zigzag “E” wave so anoterleg down should happen, followed by a bigger rally retracing any 5th wave we may get. A triangle forces a degree change as well which could end up at a wave 1 in Minor degree.
All bullish oil news in a bear market will never turn a bear market into a bull market, as bear market rallies are all starts to a fake bull market. Many still believe that oil is going to $100 or even $300 as one biased expert claims. Crazy bullish forecasts always get mentioned at the tips of bullish phases, after which the market crashes. It’s not any different this time, as the only thing that has changed, is we are in a different time period, after all were not in early 2008. Any unexpected bearish move will force “all” bullish players to reconsider their positions. They can do this by moving up their protective sell stops, just below my wave 3 in Minute degree. Very few traders have the account to maintain a bullish position, besides the smart traders saw this oil crash coming.
The $66 price level will be a set-up for a downside breakout, with the potential for a diagonal 5th wave to develop. We have a long way to go, and it may take the rest of the year to play out. All my commodity Cycle degree 4th waves are zigzags with a few triangles thrown in to keep us on our toes.
Figuring out where we are in this Cycle degree 4th wave is different between many commodities, and we are still far away for the “A” wave in Primary degree to arrive.
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Crude Oil Intraday OPEC Bear Attack Update.
We all now know the reason for the oil crash as the blame is all about OPEC increasing their crude oil output. Bears always attack from the top down and this time it is not any different than what happened in any other bear attack that oil ever had. This July contract is already well below the $67 support price level, and my bet is that much more downside is to come. A Minuette degree 4th wave rally is still in progress, so that needs to play out before another leg down can happen. Any next leg down will run into a new set of 5 waves, but this time it should be 5 waves in Minute degree. If any oil analysts are looking for price support, then they clearly don’t understand a potential bear market rally.
The majority don’t know the differnce between a bull market and a big bear market rally, which the EWP is supposed to tell us the difference. From an EWP perspective all bear market rallies get completley retraced. The crude oil move from the 2016, $28 bottom, oil moved a net amount of about $44! Even just a simple net 50% correction would send oil down to the $50 price level. Oil still has a very big base at the $40-$45 price level, so anything can still happen during the rest of this summer. All the COT reports still show the commercials in net short positions and until that changes dramatically, the oil bearish trend should continue.
The Gold/Oil ratio is starting to get very close to 20:1 which needs to expand much more as the oil price keeps declining in price. Sooner or later the oil price will take the gold price with it, as the ratio keeps gold and oil locked together.
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Crude Oil Intraday Crash Update.
Crude oil has a bit to go before all of the May rally is completley retraced. It also means that the fundamentals reasons they used for the price rise were all bogus. They were baffling us with bull shit like they have done many times before. Breaking below the psychological $70 price level is very important as now the entire world of analysts will look for all the bearish fundamentals. The big question facing all participants regarding the oil bullish phase, is if it was a true bull market or just another big fancy bear market rally?
Very few analysts know this and the emotional players know even less what a bear market rally is. From an Elliott Wave perspective every bear market rally gets completely retraced. All my work is done from a Cycle degree perspective and in the case for oil the big peak in 2008, is the Cycle degree wave three top. Since then oil has been in a huge bear market that still has not completed. The initial 2008 crash was followed by a big bullish phase, which convinced many of the experts that oil will never fall below $100 again.
What followed was another oil crash that completley retraced the entire oil bullish phase. From the 2016 bottom to our present May top was an Intermediate degree move, while $110 at the 2011-2013 top was a Primary degree top. Our present top is only “one” degree lower, yet that represents about a $43 oil price difference. Some analysts flip degree levels around like flipping hamburgers, but they don’t realize that being out by only “ONE” degree does make a huge difference in forecasting any price changes. Prices pull fundamantals up and down like a big bull or bear will follow you around with a big ring stuck in it’s nose. Forecasting a big price move also forecasts the new fundamantals when that price crash has arrived. Since I have labeled this an Intermediate degree move, I basically have a conundrum. If I make a one-degree change at this top then all wave counts going backwards must all be checked and recounted. Cosmetic wave counting will not do it, as it’s all about the structural changes that have to be made. Being out by one degree, we can be out by a minimum of 61%, which is the same as the (.618) Fibonacci ratio.
Now the guessing game will start at what price level oil will bottom. Bottom for what? A bottom that breeds a new bull market or a bottom that confirms this rally was just another big bear market rally?
If I use an Intermediate degree “A” wave peak for our present top, then I have just bumped all my oil wave counts into the SC degree world. Of course a one degree change in oil, would also put all 30 of my Cycle degree wave counts into question. Needless to say being out by just one degree is very important from my Cycle degree perspective.
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Intraday Crude Oil Crash Update.
This is the July intraday chart of WTI crude oil. In the last couple of days oil has been crashing which is pretty obvious, as the media is all over it giving you an excuse or reason for every little twist and turn in the crude oil price. The question is in how big this correction will be as every expert on the planet only sees upside in the price of crude.
There are very big counter rallies which majority can’t tell the difference. With them any thing that moves up seems to be a bull narket. In the EWP huge bear market rallies always retrace their entire bullish moves. Once the bearish phase kicks in, nothwill stop it until it is time. An intermedeate degree decline does not happen over-night as we need more evidence that this decline has more staying power. Some say oil may only correct to $50 but that would not even put a dent into all the COT positions. $50 would be about a net 50% correction which I think is not nearly deep enought.
In between $40 and $45 crude oil would get much better support, if the big bull market is still in play. But if we all are fooled as to the natureof this oil bull market then, that $40 price level will mean little. When commodities crash they can crash fast, as oil has demonstrated many times before. The longer it takes oil to create a new record high, the bigger the odds are that oil is in a bigger bearish phase than what the majority expect.
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Crude Oil Intraday Record Highs Update.
This morning crude oil was trying for $73 with this June contract. We also have a very narrow run that can fit into an ending diagonal very well. Gasoline has also been making new record highs, so crude oil is not alone in this. Oil keeps pushing higher as the world experts have all jumped on the oil bandwagon already. This oil bull market is a top heavy trade by any stretch of the imagination. A major correction must happen, or worse yet the entire bullish phase comes to an end and oil prices start to crash. It’s hard to beleive that oil could crash but it has done this many times before and under much higher bullish conditions. Just review the 2008 peak when the experts were declaring a world oil shortage. Yet 5 months later we were in another complete oil glut. The world’s bullish oil analysts never saw the oil crash coming in mid 2008 and this time I see very little difference.
This morning the Gold/Oil ratio crashed below 18:1 which keeps making oil very expensive. All future bullish price forecasts become higher and higher, until that day when all the bullish buyers are already in. Protective “sell” stops are piling up below present prices , but there is a $10 price limit where trading in oil my be stopped for the day.
Commercials do not support this bullish phase as it is the speculators that are chasing this bull market and they are in net long positions. Bullish speculators leaving protective sell stops behind them, are sowing the seeds of their own destruction as sooner or later all trends trap the participants before they know it.
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Crude Oil 1980-2018 Monthly Chart Review: The Surplus Is Gone!
The story goes that the experts have now declared the world oil surplus over. It took fundamentals close to 23 months to catch-up to the oil price. Since 1980 we had about 4 major world oil gluts and each one was followed by a wild bullish phase. The exact opposite happens at every oil peak, crude oil shortages were declared, and as soon as concensus forecasting was unaminous, the oil price would crash. All the takling heads agreed that oil prices were going much higher as inventories are starting to decline.
Storing oil is big business and the last thing smart money wants to do is store oil at high prices, so inventories are reduced. They can’t figure out why the oil price would crash when inventories are declining. At the 2008 peak they were calling for a world oil shortage and price targets of $200-$300 a barrel were pretty common. In face of all that bullish oil news, within 6 months oil had crashed about $110.
Then again at the 2013-2014 oil peaks just above $110, they declared that oil would not fall below $100 again. Sure enough witnin two years oil had crashed from $115 to $28. Oil and commodities have a great track record of crashing when nobody expects them to crash. Oil has had no problem in moving $50-$60 at a crack, so another $40 oil crash would be a walk in the park. Now in 2018 we are faced yet with another major bullish scenario, as the fundamental forecasters are at it again. They don’t report the huge short positions commercials have in oil, they only brag about the long positions of the speculators.
With crude oil going vertical at about $72, two things are going to happen, one of them is another huge correction develops, and the other is an end to this entire bullish phase, which started in 2016. Very few can tell the difference between a bear market rally and a real bull market. A bear market rally “always” retraces its entire bullish phase, and we have to wait to see if this will start to happen in the next few months. A turning will force all the players in the bullish direction, to switch or get out.
You can bet there are massive amounts of protective “sell” stops below present crude oil prices, and once they get triggered, it can produce a cascading effect. There is a $10 limit to moves in oil futures but that rarely has been triggered. My “B” wave in Minor degree is sitting at about the $45 price level. The public needs to switch to a very bearish mindset, before a major bullish move can happen again. If oil is going to crash, there is no way that gold will go vertical heading the opposite way. It’s the Gold/Oil ratio that ties oil and gold together, and it’s just a bit above 18:1 as I post. During the 2013 oil peak the Gold/Oil ratio compressed to 17:1 before it crashed, so 18:1 makes a great fit at this time.
If I’m wrong about this impending decline in oil prices then oil “must” produce a clear corrective pattern in Intermediate degree. This corrective pattern must not create a new world record low price, but it must produce another higher low. Think of “must” have as a hard EWP “Rule”, not a guideline. Another 3 wave Minor degree move will not happen overnight, as it would take many months and even longer to fully correct. Some little dip in the oil price will not even come close to force a change in direction onto the bullish speculators. As I post oil is getting closer to $72 again, so this will keep many of the bullish players locked in their positions for now. Buying low and then selling high is not the concept practiced today as even in commodaties they love to chase a bull market forcing higher and higher prices on us. Bullish moves have come to abrupt halts in the past, so I’m sure this big bullish phase will also end.
I could be faced with a degree change but making one change up or down would throw “all” my other wave counts out as well, by at least 61% or more.
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Crude Oil Intraday Record High Update
This bull market in oil keeps pushing higher and it still may not be finished. At this time it looks like and ending diagonal could be forming with a drop to the bottom trend line can still happen.
Higher and higher price forecasts for oil have flooded the internet and in the short term some of them may still get hit. The question always on my mind is “what is going to happen “after” thier price targets become true. In reality they have no clue as, and besides if they did, they might get fired for being bearish. I have no such hang-ups in calling an oil bubble, but it is impossiableto define an exact top at this time. The big question is, “Is this bull market just a big bear market rally (fake bull market), or is it the real thing.
There is nothing wrong in playing any fake bull market, but then you really have to know when to sell or go short.
They all thought that the 2013 peak was a bull market yet another crash ensued producing a complete retracement. That was a Primary degree peak and at present we may be at an Intermediate degree peak.
Bear market rallies have a dubious reputation of crashing with “complete 100% retracement”, even if it is retraced by only slimiest of margins. The EWP is still the best way of seeing bear market rallies depending on where we are counting from. My bearish wave counts come from the 2008 peak which is my Cycle degree wave 3 peak.
The entire oil bull market is so choppy that I find it hard to believe that oil prices are still going to the moon. Commercials have establish large short positions and the majority of experts are “all in”. The is a bullish top heavy trade set-up and it can only end badly. From a shortage to a glut it only took about 8 months in 2008, so this bull market can change dramaticly in a very short period of time.
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$70 Crude Oil Forecast Reached: What’s Supposed To Happen Next?
I get a real kick out of these consensus forecasts as they know that a certain move in oil could hit $70, which it did today. One thing they never will tell you is what is supposed to happen after their price target gets hit! You will never hear them say and BTW, “when crude oil hits $70 it will tank to $40”!
When oil is at $65 it’s not rocket science to forecast that oil could go to $70. Crude oil is pushing all the buttons, but every new record high could be the last record high just as well. Sooner or later we will achieve the high for all of 2018. I have posted many links and COT charts showing how the experts are all leveraged to the bullish side in oil, and even the commercial COT reports back that up. When a trade is this lopsided, it has no choice but to crash. All the protective “Sell” stops are piling up below present prices and some professional traders know how to trigger them.
To say the least I’m very bearish on crude oil, until such a time when I can see a real and proper correction has taken place. That will all depend if the entire oil bull market was a fake or not! Otherwise known as a “Bear Market Rally” All bear market rallies eventually return to where they started from and bullish investor will be in shock that an oil crash can even happen. Of course, then the blame game will start again as it usually does.
Everyone will regurgitate fundamental reasons why oil should continue to soar, but the biggest fundamental they are all ignoring is the huge amount of bullish bets in one direction. Who is left to get in? All these one sided bets are all looking for the greatest fool to sell too, but usually all they have to do is look in the mirror, and they will see the last greatest fool still standing!
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Crude Oil Daily Chart $300 0r $21?
It’s a new month and crude oil seems to be at a peak. One little desperate spike last night before it started to back off this morning. I have used this zigzag for some time and this last bullish phase is a diagonal 5th wave. I just read the story that a $300 crude oil was forecast in the next few years. I talked about all the crazy forecasts that we will hear, and this one is the icing on the cake.
On the bullish side, we had the $100 forecast, but they seemed to jump to a $300 forecast. Well folks, I trust my wave counting instincts a lot more, than price forecasts from the most bullish sector on the planet right now. These bullish forecasts from a biased bull inside any sector is a magazine cover or “blog cover” story indicator, and usually marks a peak as well. The Bitcoin peak had the same thing. I have been using the crazy forecasts as indicators for a long time, but they are a bit on the rare side.
$64.40 is the first resistance price level to break and from this May 1st peak it could be downhill for oil prices for the rest of this year. This oil bull market is ready for a “Big Dip” that will be far bigger that anyone expects at this time. An inverted zigzag is a very bearish pattern, and definitely not a bullish pattern, so this so called “oil” bull” market is just a big bear market rally and technically must get completely retraced. This is not based on some mythical isolated wave pattern, but I have “many” of these types of patterns I’m working. Even with gold down and oil pointing up the gold ratio never broke a sweat and is still just under 20:1 today!
Once it starts to dip the $300 oil price forecast will disappear and the $40, $28, $21, and $10 oil forecasts will appear again. I’m very bearish on oil and when a small group sees that fact at the same time, then we usually have a mini price panic. All futures are leveraged asset classes and if you don’t understand the volatility yet to come, then you better run to cash!
Volitility just means a trend change is coming, so hang onto your hat because the oil winds are shifting from the SW to the NW this summer.
Elliott Wave 5.0 is all about Cycle degree wave counting and at this time I have a preliminary “Peak Count” of about 16 wave 3 peaks in Cycle degree. That is the “most” Cycle degree peaks that you will ever find on the internet anywhere! Not a single expert wave analyst can even find one SC Degree wave 3 peak that will hold, but I’m dealing with 16 at this time. Technically speaking, we should have 16 Supercycle degree wave 3 peaks if all wave counts were shifted up by just one degree. In the EWP if you are out by one degree, we are out by a mile as that can mean being out by 60% or more. (.618)
Not until all 5 waves in Cycle degree are found and they hold, then after this is where wave counting enters the realm of Supercycle degree. If we are lucky this may happen closer to the 2029 time frame.
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Crude Oil Weekly: Impending Oil Crash Review!
“Is This the Most Bullish Oil Market of All Time?”
The longs to shorts ratio in the six major petroleum contracts rose to record highs last week—a sign that hedge funds and other portfolio managers are certain that the direction for oil prices in the coming weeks is up.
In addition, over the past two weeks, options traders have boosted their bets on Brent rising to 80 U.S. dollars a barrel, and calls on Brent at 80 is the most crowded options trade on the ICE Futures Europe exchange, followed by call options on Brent at 70 a distant second.
Options traders hold nearly 137 million barrels worth of 80 Brent call options, a 37-percent jump from two weeks ago, Bloomberg reports.
In the six most important petroleum contracts, money managers held long to short positions in a ratio of nearly 14:1 last week, compared to a 12:1 ratio at January 23, [2018,] when portfolio managers held the record net long position in oil — 1.484 billion barrels, according to regulators and exchanges data compiled by Reuters market analyst John Kemp.
For the week to April 20, [2018,] money managers held a net long position of 1.411 billion barrels of Brent, NYMEX and ICE WTI, U.S. gasoline, U.S. heating oil, and European gasoil—close to the record net long position from January.
In Brent and WTI only, money managers held last week the most lopsided position ever, with 15 longs for every short.
Hedge funds’ ratio of long to short positions in Brent and WTI jumped to 15:1 from 13.2:1 the prior week, Kemp has calculated using exchanges and regulators data.
–Tsvetana Paraskova, “Is This the Most Bullish Oil Market of All Time?”, OilPrice.com, April 24, 2018.
The above research is priceless as it has nothing to do with ordinary crude oil fundamentals that the majority constantly use. Forecasting with fundamentals didn’t work at the peak in 2008 and it sure will not work at the peak in 2018! Sounds like a 10 year cycle between peaks to me.
Usually when the majority are all thinking the same then chances are good they are also wrong.
Oil has had a great run and right now all the experts/investors/traders are bullish. From the 2016 bottom crude oil started to rally, but it was in a very choppy pattern which is a clue that the rally is going against a bigger trend of at least one degree higher. I show a falling wedge with the two starting points starting from Primary degree points. The bottom trend line does not need a degree in rocket science to see, as any kid with a ruler can connect them together, if they have the minimum skills of conventional technical analysis.
Fundamentals will always give us the wrong information at the extremes, and oil is a prime example of this. My wave count shows a 4th wave rally very close to completing, or already completed, on Friday. The correction in this zigzag run was an expanded running flat which is a pretty popular pattern. No triangle happened in this correction, but zigzags can contain triangles in the last “B” wave before the end.
In 2015 as oil was crashing the Gold/Oil ratio peaked at 17:1. We are presently hitting 19.41:1 which is one of 4 readings under 20:1 since the start of 2018!
The Gold/Oil ratio has been going nowhere fast, as it seems to have hit a ratio price brick wall. When crude oil starts to crash, this Gold/Oil ratio will start to spread again. When it hits the bearish, Gold/Oil Ratio brick wall, then that will be an early signal that crude oil may have bottomed.
How long do you think an oil decline will last without the Gold/Oil ratio getting all bent out of shape? Gold soaring and oil crashing is going to put a huge strain on the ratio. If we use the Fridays expensive ratio of 20:1 then the price of gold should be closer to $1600 with an $80 crude oil forecast.
Only time will tell what is going to happen next, but I will remain bearish until all these oil bulls stop spreading their bullshit everywhere they go. A good surprise bear attack will force the oil bulls to finally think twice, but by that time it’s too late already.
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December 2018 Crude Oil Review
When I looked over the crude oil December 2018 contract, I found an extra diagonal wave 1-2. With the June contract, no way would that fit as a 1-2 wave.
December is also a little less busy as the waves seem a little less jerky. Rising wedges happen in bull markets and this oil chart has a pretty good rising wedge right now. Wave 3-4 in Subminuette degree, are the two starting points which makes this a Subminuette degree rising wedge. I will always try to keep my wedges between two of the same degree levels at all degree levels. From the 4th wave bottom in Subminuette degree is a diagonal 5th wave, not an impulse 5th wave. If we count oblivious to the diagonal, then you end up with 7 waves. We need 5 diagonal waves before they finish and that is what I counted out.
This is also a very common diagonal and gives us big hints that we are in a 5th wave location. One of my own rules is that all 5th waves must always be capped by one degree higher. If there is no “cap” then the Elliott Wave sequence has been broken and it can no longer be trusted.
I don’t have enough room to fill all the degree levels, but it’s not ending on a “5”. 🙄
I will be switching to this December chart form now on but it is $2.79 per barrel less than the June contract. This doesn’t instill bullish fever from my perspective. Experts are not even looking that far ahead, otherwise they would be reporting it as well.
Does this change the Gold/Oil ratio? Not really, as we are at 20.14:1 today. It’s been around this average for over 3 months and does not seem like the ratio is dramatically changing.
Some are calling for $100 oil this year, but they forget about the gold/oil ratio as $100 oil would mean a $2000 gold price.
We could be at a fake top so oil would have to dip soon to help the bearish case.
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Quick Look At The Crude Oil Intraday Crash.
When we look at the Intraday oil chart, we can see violent moves in both directions. If fundamentals make oil go up and down, then we should know exactly what news story created which move. The fact it’s next to impossible to forecast the price of oil with fundamental analysis. Even the experts couldn’t see an oil crash coming back in 2008 and they all used fundamentals to justify any price move. It is also very rare that you will find any oil bulls scream “sell” at a major top! When markets are down, analysts give us a reason why it went down, and when this market goes up, they post all the good news about oil.
In a bearish trend any bullish news will have little impact on the overall bearish move, until one day bearish news keeps oil from going deeper, then we know that a reversal will be coming. In 2015 massive news about the world oil glut, no longer had impact, after which oil turned and soared again.
Bull traps and bear traps happen all the time, but if we’re not looking for these traps, we will step in the trap ourselves. Raw human emotions drive the markets and leverage compounds our emotions.
So far, this short term bearish move has not completed like what I would like to see, as oil is in a bit of a rally. If the bigger trend is real then oil has much further to fall if the 4th wave scenario holds true.
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Crude Oil Intraday Update
About 5 days ago crude oil peaked which produce what looks like a triple top. The third peak is a wild spike which you can ignore, which doesn’t happen in line type charts. After yesterday’s bottom oil rallied before it started to grind back down, which does not fit into an impulse anymore. I labeled the entire move as a zigzag, but a diagonal can also fit into a 5th wave decline, so both wave counts have to be kept in play until one gets eliminated. Oil is a wild animal at best of times so violent moves are going to happen. We can draw trend lines, but it is far too early to start doing that. In a bear market lower lows is the pattern of a decline, so lower lows below $65.60 should happen.
Our present little rally as the makings of a 1-2 wave so if the quality of any 5 wave decline remains very high, then this would be a very good bearish sign.
This may be wishful thinking, but wave structures do smooth out a bit once any bearish decline is more accepted by the majority.
On a bigger scale crude oil has a Cycle degree declining wedge in it, so that alone can forecast another huge bull market in a few years time. The whole idea of high degree wave counts is to “see” it coming long before the majority ever will. When a big group of investors also seen the same thing, then you can get what would be a mini panic. This has only happened in a very small scale, so bigger panic situations will arrive as more and more people get suspicious to the staying power of this so called bull market.
The Gold/Oil ratio has not changed hardly at all, as it has been hitting the ratio brick wall for months already. Today the Gold/Oil ratio is at 20.23:1.
In Canada, Alberta is talking about conduction pipeline wars, as Alberta wants to cut oil supplies into BC, if the pipeline does not get built. If this actually happens, then BC could see some explosive gas price increases at the pumps, crushing BC’s economy along with them.
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Crude Oil Intraday Update: Resuming Its Trend
So far the crude oil down trend has had a good start, but it is still a bit early to tell. I might have to drop my degree level down by one degree in the future, but right now I can keep the same wave count that I started with. If the bigger bearish phase is real then the small double to you see could be the record high for oil in 2018.
On this June contract $66.20 seems to be the record to beat.
In order to confirm a potential Intermediate degree 4th wave top we need 5 waves down in Minor degree or even a single zigzag type move also in Minor degree.
What we just finished looks like a 4th wave top because immediately after, diagonal patterns started to emerge. Diagonals have a nasty habit of showing up in 5th wave declines, so instantly diagonal wave counting has to be used. Any wild spike early next week could still take out the top trend line, but we should always expect wild counter rallies after a steep decline.
The Gold/Oil ratio is now 21.36:1 and this ratio should keep on expanding as crude oil declines. I would also like to see all the COT reports in oil start to show that the commercials are becoming net long. At this time we are a far cry away from that happening.
This year it looks like the June and December months are the two busiest months, which is great. The December contract is running about $2 US dollars lower, so this does not support the oil bull market to keep going.
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Crude Oil Intraday Gyrations Review
Last week, crude oil created a double top with the secondary peak being a bit lower. I show a starting 1-2, 1-2 count and a third 1-2 wave count might become visible due to the fact they are very small waves. I show a “C” wave bullish move which I counted as a diagonal “C” wave. The Gold/Oil ratio has not changed that much, but this ratio at about 21:1 is running into a brick wall as it has been stuck around this ratio for some time.
There is a very good chance that crude oil will dip along with stocks, and when that becomes more obvious, then the Gold/Oil ratio should expand or get cheaper.
Commercials are net short WTI crude oil, but they are also net short the Europe Oil ICE futures. The speculators are in the exact opposite positions as they are the trend chasers and always get themselves in a trap. In this case speculators are caught in a bull trap. Until some of these numbers change I can’t see any extreme bullish oil scenario at this time.
The commercial traders deal much closer to the oil industry than any speculators do, so they carry a lot less risk than the speculators. Commercial traders are not going to store high price oil, because they make no money, but when the oil price crashes it is very profitable to store oil. They will pull out all the stops to make this happen when the price of oil crashes again. In one world oil glut, (2008) they had 25 tankers floating around the Mideast gulf region at that time. Low and behold all those tankers eventually disappeared. The same thing happened at the 2016 low, as they were stacking up oil carriers to deliver oil to China.
Not until I see that a huge corrective pattern has taken place can I turn bullish on WTI oil again.
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Crude Oil Still Double Topping
This double top is so close to call that I switched back to a potential zigzag bullish phase that can work in a diagonal 5th wave. Gasoline is far from reaching any potential double top, so we have a good divergence between the two types of commodities. There is not much we can add to the short term picture except that oil can head south right along with the stock market. The commercial traders don’t instill any great urgency to pile into this extended bullish push, as they have been net short for some time already. $65.50 is the price to beat with this very busy June contract. Once mid June rolls around, I will then switch to the December contract which is just as busy as this June contract is.
The December contract is also much lower in price by about $4. It would be far more bullish, if the December contract is higher in price!
The Gold/Oil ratio has not made any real dramatic moves as it has been averaging around the 20.5:1 ratio. This ratio must keep compressing otherwise it has a high probability of starting to spread. A spreading Gold/Oil ratio would then show us that oil is getting cheaper when we use the Troy gold ounce as a measuring tool.
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Crude Oil: Break Out, Or Bear Attack?
Once I had a look at the intraday chart I had to bump it up to 3500 bars from my normal 500. This allows us to go back further, but still keep Intraday settings. At the $65.36 price level crude oil could be hitting a brick wall, at least in the shorter term. We have a double top and a big obvious Head. In true bull markets, these types of H&S setups can be very bullish, But if we are ending a bullish phase, then this H&S pattern can be an ominous warning.
It sure looks like a bullish zigzag but I do have choices depending what oil will do next, if it crashes with another zigzag, then a triangle will work, but if any decline looks more like a 5 wave sequence, then an expanded flat could be completed.
We could roll around the $56 price level for a little while, before oil turns and soars again. I think if another zigzag develops heading down, then we should get a big “b” wave counter rally. I will give crude oil until the $55 price range, but after that the wave counts could get trashed rather quickly.
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Crude Oil 2009-2018 Weekly Chart Review
What the majority that called that crude oil was in a bull market didn’t pan out that well. The crash into the 2016 bottom made sure of that. Even now, many call this a bull market, but they are also waiting for a correction. With crude oil we have monthly contracts, but I always look ahead to see where the next busiest month is.
Without a shadow of doubt, the June 2018 and December 2018 contracts are the two busiest months. This means when the June contract expires I will be going directly into the December 2018 contract month. There was a 25 cent difference between the April and June contracts which is nothing in the bigger scope of things which produced little change in the Gold/Oil ratio. I will talk more about the Gold/Oil ratio at the bottom of this page.
The fact that I’m showing a Primary degree “B” wave top must make the July, 2008 peak a Cycle degree peak. At the early 2009 bottom, we have a bear market about 7-8 year’s long, plus another two years in our present rally. It would be something if crude oil ended up with a bear market lasting 13 years! I don’t think we can get that lucky because the big question is if our present rally is a fake.
This could still take a few more years and we need something more solid to go on. During the 3 year, topping process oil created a classic wedge which gave us a clue that a down draft in the price of oil was coming. Flip this wedge in reverse and you would get an explosive rally, like what happened with the VIX.
Analyzing Chart Patterns: The Wedge
The H&S pattern didn’t disappear or is no longer important, even with a higher right shoulder. The January 2018 peak finished at $65.52, but there is no guarantee it will hold in the short term.
Crude oil crashed along with stocks in 2008, but also recovered with the stock market in early 2009. What has happened once can happen again, so I sure don’t want to rule anything out.
Any 4th wave bullish phase should technically get completely retraced, which would be lower than $28 on a weekly crude oil chart.
America has become a giant oil exporting nation so they can pump as much as other countries are willing to buy. The supply may not be an issue, but demand could dry up and blow away. This is speculation based on a possible 4th wave scenario in Intermediate degree.
Why U.S. Oil Exports Are Surging | OilPrice.com
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Crude Oil Intraday Update
I carried on from my last wave count and so far I can still make a bearish scenario work. As I post, crude oil was going up so any alternate move could slice through the top trend line The Gold/Oil ratio has hardly moved and is averaging around 21.5:1. Commercial traders are also net short so they don’t see a real bright bullish future for WTI crude oil. The USA is going to join the world club in being in the top three oil exporters, right along with Russia and Saudi Arabia.
I’m bearish on oil, but I’m looking for the pattern that shows the best 3 wave corrective crash before I turn super bullish on oil gain. Once this oil chart starts to do too much of sideways dance, then another better fitting wave count should be found.
This is always harder than it sounds, but constantly looks at the bigger picture as well. The top trend line shows that we have lower highs still developing. At this intraday scale, this type of a trend line can get trashed very quickly.
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Crude Oil Intraday Crash Review
Since the mid February bottom, crude oil charged up producing a wild pattern that just will not work as a simple impulse wave structure. Rallies this choppy usually retraces the entire move, but we need oil to dip much further to help confirm my suspicions. As I post, a small rally is taking place, so anything can still happen. Inventory levels are being drained, and many large oil fields will be losing their production capabilities in the next few years. Crude oil inventory levels mean little if the stock market is going to enter into a recession.
In the 2008 crash even gold and oil plunged with the markets, so any event that has happened in the past can happen again. Commercial traders are net short crude oil but not with any real screaming bearish numbers. A quick calculation puts the net short ratio at about 1.35:1 which is not an extreme position.
If this bullish run is over then the $58 price level would be the next main price target to get hit. I’m looking for the big move to look like a correction has completed, but at this point I still can’t jump on the crude oil bullish bandwagon.
The Gold/Oil ratio hit 21.17:1 today, which has been pretty normal in the last month or so. Any fast move which compresses the Gold/Oil ratio very quickly can mean, a much bigger decline is just around the corner.
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Crude Oil Intraday Rally Review
Crude oil soared after what looks like a double bottom. There is a strong probability that crude oil is completing a 4th wave rally due to its choppy rally. There is a chance that crude oil can still break higher, but then we would also be getting very close to the bottom of my wave one in Minute degree. We may have to wait out all of February for this move to clear up, but otherwise it could turn into a wave 2 in Minor degree.
I have nothing better at this time, but oil could still see downward pressure along with the general stock markets. Oil certainly rallied also with stocks, but stocks may still have upside left in the next few days. The Gold/Oil ratio is hovering around 21.63:1 but this should expand if crude oil resumes its southerly direction.
I’m not going to turn bullish except for short term bullish runs. Until I see that a clear cut correction of sufficient physical size has completed, I can’t turn bullish for the longer term.
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Crude Oil Explosive Rally Update!
I was expecting a 4th wave rally and the markets did not disappoint us. There was a strong small counter rally that may put a crimp into this wave count, but eventually the crude oil should resume it’s southerly path to what could be a new wave 1 but in Minor degree.
So far the Gold/Oil ratio of 22:1 has been improving, but it will be a slow process. I constantly look at the daily and weekly oil charts, but switching from a daily chart to a weekly chart will dramatically change the wave counts. Until all the oil bears have come out of their caves and sliced every oil bull in the process will we be in a position when oil can start another huge leg up. Maybe crude oil can turn back into a glut when the US government sells off its reserves.
Fundamentals are lagging indicators so if the experts see that an oil glut has arrived, chances are good the glut is over and a new bullish phase will start. The markets will always do the opposite of what fundamental reasoning suggests, as the biggest gluts produced the biggest oil bull markets.
Until I see a great looking corrective oil crash playing out, I can’t turn bullish for the longer term.
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Crude Oil Crash Update
This is the April 2018 contract month, but it’s a bit too far ahead in time. It’s not a big deal as we still have to figure out what the potential wave count is. We do have a double top kind of a pattern which I’m working as a diagonal set of 5 waves down. On Friday we ended with a sharp spike to the downside which can produce another rally push crude oil right back up to the $60 price level.
Even now this crude oil slump has not gone deep enough for the bearish phase to be called finished, so this impending rally could be another fake as well. I’m looking for a possible zigzag correction in Minor degree which I can’t call completed at this time.
The Gold/Oil ratio has improved somewhat, but not by any great leaps and bounds. At 22.34:1 it is now back to where the ratio was in early December of 2017. The ratio may not be any help to us at this time, unless it shifts dramatically in a very short period of time.
In the short term I may have to shift my degree levels a bit, but I might do that after this rally completely fails to materialize.
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Crude Oil Intraday Update
Like gold, crude oil also had an impressive rally, but the oil price has now started to back off. Any normal correction could fall back down to the previous 4th wave of one lesser degree. This would be close to the $58-$56 price range. Of course, if a bigger degree decline is going to happen, then that $56 price level will not hold. Either way the oil price could decline along with the stock markets. At times the oil price correlates with stocks as oil crashed just before stocks hit a major bottom.
This happening again is a very high probability situation and can’t be ignored. Even though it may not happen, a previous major low in oil could be down between the $48-$44 price levels.
Last weeks Oil COT report had the commercials net short by a wide margin, with the speculators doing the exact opposite thing. It’s the speculators that always chase a trend, as they are adding to their net long positions as the oil market is pointing up. Speculators added 20,444 long positions last week, just before oil started to suffer a correction. The mass media reports using the speculators numbers, as they think fund managers is the smart money.
I was hoping for more of a compressed Gold/Oil ratio than this present 21:1 ratio. Even before the 2014-2015 oil crash started, crude oil had a 17:1 ratio, which ultimately ended with a 44:1 ratio. On any oil decline, we will eventually see the Gold/Oil ratio start to spread again. This ratio may hit 25 or 30:1, so we have to be aware of this when it happens.
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Crude Oil Intraday Record High Running Out Of Gas?
Crude Oil seems to be running out of gas and has started another move that could fall much lower or deeper than what the majority think will happen. When I think it is important, I will post multiple wave counts.Since I dropped the degree level down by one degree, but used the bottom of Minscule degree. I will no longer post any wave count that is smaller than the official list of 15 degrees. By using only 15 degree levels, it helps to better gauge the end of a run across most intraday charts.
Simply put, “once we run out of degree levels, the bigger trend is also coming to an end. The size of the 4th waves get smaller and smaller, as we get near the end of a run. I have gone back to using the fixed degree list for some time already, which most readers will never notice the change.
Yes, I may still be a bit early, but we have to be a bit early so more readers can adjust their thinking. If we go back to the daily chart, we can see a major bottom on June, 22, 2017 of $44. This would be a very bearish downside price target, which is hard to imagine, but I would consider a decline like that as pretty normal.
We are dealing with wildly leveraged commodities contracts, that have a very bad reputation for making crazy moves that are very hard to catch before they happen.
It will remain to be seen if we have more upside left, but I sure like the idea of a triangle in a 4th wave which was followed by a “thrust” to the upside. The triangle forces a degree change as well, and most of the time it can be a difference of two or more degree levels.
At $60, oil has run into resistance and struggled as it touched $64 so far. There is also a huge H&S pattern with the daily charts, and we know these patterns can also produce violent reactions.
The Oil volatility index OVX also had a bottom at $22.98 and has now started to climb again in recent days. Technically speaking the OVX will rise much more if this bearish oil correction starts to take shape.
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