Tag Archives: Elliott Wave Oil

Crude Oil Intraday Bearish Review

Yesterday, crude oil peaked with a small double top after which oil immediately reversed its trend and now looks like a new trend is forming.  Since my top could be a 4th wave top in intermediate degree. I know that my largest degree of this decline must only be Minor degree, so I sure do not want to start with a a degree far too high.  One 5 wave sequence in Micro degree has already started with two lower degrees also visible. I have used Miniscule degree which is the bottom from my list of 15 degree levels. I will adjust my degree levels once this decline starts to show its true colors.

It is also a good idea to look for bear traps at the earliest moments but that might happen when all the patterns start to get super choppy. We need more evidence that this move is part of a bigger bearish run, and until then we have to be aware that we can always be wrong.  The longer it takes for any new highs  to be reached again, the better I like.

The oil bullish peak came within 45 cents of the $70 price forecast, but that forecast is an easy call if we were at $65 already. As I post, this chart has already dipped much lower, but in the end only time will help how this progresses.

The Gold/Oil ratio has compressed a bit more which means crude is still hitting the ratio brick wall. The Gold/Oil ratio is at 19.71:1, but it’s supposed to go the other way. In relation to the last 3 month Gold/Oil ratio average this makes oil more expensive.

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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 Crash Update

 

This chart is in a 5 minute setting and it is switched to a line type setting. The bar chart version was so choppy and it created erroneous spike, I couldn’t tell where to start the countdown from. The secondary peak was the real top of this run, which also produced a triple top along with a wicked H&S pattern. This is also a prime example of what a H&S pattern can do at the peak of a bullish run and the end a rising wedge.  Crude oil also had a little sideways move, that from my perspective is a perfectly formed triangle. This Elliott Wave Triangle gave me a warning that I can’t use a 1-2, 1-2  wave count.

Early this morning crude oil soared one more time, but now has already started to back off. I can take another zigzag rally as we could have finished another inverted 1-2 wave set.  Worst case scenario is that crude oil keeps soaring because we missed an expanded top. If the big trend has reversed, then we should see crude oil take out our present $66.13 price level. Oil may still pop to a new rally high, but only time can confirm that.

As I post oil is soaring once again so this wave count could be trashed by the end of the day.

 

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Crude Oil Intraday Bullish move Update.

Since early March oil has been on a real bullish roll that could be coming to an end shortly. Many of the fundamental news releases tell us how bullish analysts still are. How can oil crash with inventory levels fluctuating constantly? The same thing happen just before the 2008 peak in oil, when every expert in the world was proclaiming that new record highs are on their way, but yet the oil market tanked and in just 8 months, the world was in another oil  glut!  Oil not only crashed once, but it crashed again when experts were claiming that oil would never go below $100. How long did that expert opinion last?  The next thing we know another world glut has arrived at the $28 price level, before it charged back up to the +$65 price range.

I had mentioned it many  times that the $60 price level could give oil some serious price resistance, with a present price of $67. Since the April 6th bottom crude oil executed a wild run that sure seems like it is starting to fizzle out. In the last 2-3 days oil has been forming what looks like a rising wedge, which can and do produce amazing reversals once they get close to completing.  In this case the wedge is a Micro degree wedge which in this case we can call an ending diagonal. Diagonals can take up the entire 5th wave, so any diagonal in any 5th wave forecasts a reversal. Any 5th wave peak must also be capped with a one degree higher wave count. We should “never” see 5th wave peaks left empty anywhere on the Internet.

At a minimum I always like to confirm a move with two lesser degrees and sometimes even three depending on physical size. To confirm a 5th wave decline in Intermediate degree, I “must” see Minor and Minute degree subdivisions and occasionally a third degree will help.

Many are calling for $70 oil, but where were they when oil tanked to $28 at the 2016 bottom?

The Gold/Oil ratio has bounced from an extreme ratio of 44:1 and in the last three months it has been sitting at an average of 21:1. This morning oil dropped to the 19.92:1 range, which was a small, fast dip that have preceded reversals before. When the ratio is hitting a brick wall so to speak, this means that something is up as that is what also happened with all my stock index ratios. This Gold/Oil ratio should start to spread again as oil declines, and until those numbers change dramatically, I will remain bearish on oil. Crashes in commodities can happen extremely fast, as oil clearly has demonstrated in the past many times.

Crude oil also has a huge Cycle degree wedge in progress which could usher in a big Primary degree move in the future. Five waves up in Primary degree would work for me. 🙄  I have incorporated solar cycle wave analysis into EW5 and at this time crude oil prices should still be attracted to the start of solar cycle #25. Oil did exactly that with the late 2008 crash and the start of solar cycle #24.

As I post crude oil is heading down, so that’s a good thing!

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Crude Oil Intraday Rocket Ride Update!

I was suspicious about my March peak, which I now counted out with an expanded top, followed by two sets of 5 waves down. All my degrees are being used up and I will not longer count out smaller than the 15th degree. When I consistently run into the 15th degree level, and still see a few smaller wave sets, then I might have to look at a higher degree, but so far there may not be the need. The bottom of April 6th is now a diagonal 4th wave bottom. Just today it is getting close to the top of my trend line, so another correction should be due. Fears and uncertainty have arrived in the oil market and we can thank Trumps Tweets for that.

Since the March bottom we have been in a “C” wave bullish phase, and this oil move is a prime example what can and does happen in “C” wave bull markets.

How much more crude oil will run is uncertain, but the end could also be near.  Even with all these wild swings the Gold/Oil ratio hasn’t changed that much and is still bouncing around the 20.29:1 range. Eventually I would like to see the Gold/Oil ratio expanded closer to the 30:1 ratio, but that is not going to happen for quite sometime yet.

Remember, as fast as oil has gone up, it can come down just as fast. You will not be safe in this bullish trend for very long. With this move it just extends the “C” wave in Minor degree.

I’m starting to mention that crude has a huge Cycle degree Megaphone in the works, between the Cycle degree wave 3 top and a Cycle degree wave bottom, which once completed should produce yet another rocking bull market in oil. This may still be 2 3 years away so don’t get too excited just yet. Megaphones have open cones, but wedges and even Scalene triangles have mostly closed cones. I will start calling Megahope patterns by the size of their degree levels, as Cycle degree Megaphones can produce 5 waves in Primary degree. The US dollar also has a Cycle degree Megaphone in progress, and I think there are more out there I haven’t discovered yet.

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Crude Oil Rocket Rally Update

Crude oil made an ugly decline (diagonal) into the bottom of April, 6, before crude oil soared once again.  Crude oil has now rallied far enough to where it has resistance at my previous wave 2 peak in Micro degree.  Also a H&S pattern is developing, which in a bear market rally is a bearish sign. In a bull market this H&S pattern would be just a temporary stop.  The real reason for the rally is that all of the protective buy stops are being triggered by some news release regarding declining inventories. The news does not suddenly turn a bear market into a bull market, even if it looks like it.

This rally will only get confirmed as a bearish rally once this entire intraday bullish phase is completely retraced. Even the December crude oil contract is still lower in price than the June contract, by $2.75 a barrel.  This does not bode well for a huge bull market in oil to keep going. As I post crude oil has broken the $65 price level by a small margin, but still a far cry away from breaking to new record highs.

Add to the fact that most commercial traders are net short crude oil with a 20.58:1 Gold/Oil ratio, I will remain bearish until such a time when a big correction has taken place or is completing.

As fast as this rally charged up, it can crash just as fast, so hang on to your britches folks, as this could get rather violent swinging into the opposite direction.

Longer term we could be heading back to a world oil glut and they will start to store oil in very large crude oil tankers.  As soon as all the experts realize that an oil glut is here, then it will be over and the price of crude will soar again.

Crude oil has a huge inverse Megaphone (Wedge) pattern which is a very bullish indicator and can produce amazing bull markets. Again, this is a bit early to describe a big bull market in oil if the oil charts presently contain an inverse zigzag!

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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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Quick Crude Oil Intraday Update

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.

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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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March, 7, 2018 Crude Oil Intraday Crash Update

I have made a few changes with the oil wave positions. I added the 4th wave in Intermediate degree at the January top.  This is not chiseled in stone, but I have to use it to eliminate it.  This next set of 5 waves must crash below $58 as that alone will help to confirm that this wave 2 rally in Minute degree was just a bearish trend counter rally.  Usually with any zigzag crash the “A” wave can be very steep, with the “C5” wave meandering more obviously.

This is not what is happening so the wave two rally has a good chance of holding.   Just by adding one higher degree of the 4th wave in Intermediate degree makes the 2008 peak a Cycle degree top.  The major rally from the 2008 $34 bottom to about the 2011 top ($115)  was confirmed as a bear market rally, when oil crash to about $28 in late 2015.  If oil keeps progressing south, then by the end of 2018 we would be finishing a 10 year bear market. A 13 year bear market would get us very close to the 2021 time period, just in time for solar cycle #25 to take off.

I have mentioned it several times that oil could fall to $12 if the rally that started in early 2016 was a fake. It sure was frustrating enough to count out. Some fundamentals are very positive, but they are still years away from kicking in. Oil fields get pumped out which slows worldwide oil production.   I look up or down with the wave counts, but 2-3 years is still a long time where anything can happen.

Many presidents in the past have added duties on countries and it all sound like a trade war as well.  Most of it is just jawboning rhetoric and it will never happen, so don’t get too wrapped up in the “Tariff Wars” that the mainstream media loves.

The commercial traders are net short WTI oil by a ratio of 2:1 while the speculators are still net long by a ratio of 6.9:1. This is a huge bull trap that the speculators are in. These numbers should eventually reverse and when that happens, then another set up for an oil bull market should happen.  The Gold/Oil ratio has not really changed that much and is still sitting at a bit over 21:1, which seems to be a double and even triple top. This ratio should expand when oil gets cheaper,  and then compress when it becomes more expensive.

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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 Rally Is There More To Come?

This crude oil rally has gone higher than what I would like to see. I’am pushing my luck if I keep calling this a 4th wave rally, but when dealing with diagonals we can have some stunning moves and then make equally stunning reversals.  I can’t fit this rally into a clean impulse at all, so I have to look at it from a diagonal wave perspective.

These ugly bullish moves can be fake moves, and we have to wait until this run breaks to new record highs, or crude oil heads south below $58! I read reports about Asian oil field production levels are on the decline in the next few years, as big oil fields start to lose their production capacity.

Combine declining oil field production and lack of finding new oil fields sure could put a crimp on future oil supplies.  The real reason that oil is going up could be because of winter demand, and the coldest time of the year!

US map reveals the coldest days of the year across the United States | Daily Mail Online

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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, Still In The Bullish Game?

 

Oil has not made the decline, like I hoped it would, but chances are good that a bigger correction still has to play out.  The bullish phase that started in June 2017 from the $44 price level, has a stubborn streak to it as it refuses to correct. This stunning rally could still see a 61% correction, which would bring oil back down to the previous 4th wave of one lesser degree.  One previous gully sits at the $50 price level so a 61% net retracement could end down at the second gully.

The Gold/Oil ratio isn’t exactly screaming cheap as it has been hanging around this 20.77:1 ratio for far too long.  Back in 2014 this ratio spiked to 17:1 before crude oil started to implode, so a 20:1 ratio is not all that far away from doing the same thing.

I wish I had a much better, wave count than what I see, but converting from winter fuels to summer fuels will change the crude oil dynamics somewhat. Of course the 2018 hurricane season could also have a huge impact, so oil could crash and then turn around and soar.

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Crude Oil Bull Market Update

Recently, analysts have been painting us a very bullish picture, as  “$ 100” oil is coming.  Just like in true style the $70 per barrel has been changed to a $100 price forecast.  It’s just amazing how analysts once were calling for $10 oil, now suddenly see “$100” oil in our future. If these forecasts are believable, so why can’t they tell us  what price level oil can crash too, once or if  crude oil hits $100 per barrel.

We’ve had a long skinny bull market, which can’t continue forever. If only a short correction is coming, then the $55 price level could get hit, but if a bigger correction is due crude oil could fall towards the $45 price range.  In 2008 Oil crashed with stocks before, so there is no reason why it can’t do again.

The Gold/Oil ratio is just a bit above 20:1 but in 2014 oil crashed from a 17:1 ratio. Sudden compression moves in the Gold/Oil ratio usually produced a decline in oil prices, but I have not noticed that happen at this time.

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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 Impending Bearish Phase.

I mentioned that I was very bearish towards crude oil, and that oil could slump into a bearish phase, already expected by many others experts. Even though oil has travelled north I will remain bearish until I can see some type of a sincere corrective wave playing out.  Even if it is a shorter price bearish phase, any market can come back to the previous 4th wave of one lesser degree. This would mean oil could see the price range between my “D” and “E” waves.  This is only a strong guideline, not a strict rule, as markets go under previous 4th waves all the time.

This time the Gold/Oil ratio was sitting at just under 21:1, this is not an extreme ratio, but it sure would work as an interim short term ratio peak. Just before the oil crash in 2014-2015 this ratio started with a 17:1 ratio. Ultimately the Gold/Oil ratio crashed to 44:1. The decline can be fast or slow, so anything can still happen in the short term. They have forecasted this $70 price level for sometime already but so far it has been an elusive target. Many report great crude oil fundamentals, but then again “every” major top will get you amazing fundamentals.

A potential price crash forecast changes all the fundamentals once the prices hit a major bottom. At the 2008 peak experts were convinced that the world is running out of oil, and had warned us that $200-$300 oil price would happen. Yet the oil price crashed to $34 and next thing you know the world was in another oil glut by late 2008. Fundamentals will always tell us the wrong things at the extremes, but the Gold/Oil ratio could still crash to 25-30:1.

Even the gold pattern is looking much like oil, so gold stocks could take a correction hit as well.

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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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Crude OIl Daily Chart Vertical Move Update!

Oil has now exceeded that $60 price level, but oil has done so with a wild surge to the upside. This last wave I have is starting to look like a single long 5th wave after what was a potential triangle 4th wave. I can’t remain bullish on oil until oil has made a significant correction. Traders are chasing anything that goes up so oil makes for a perfect target. Even a normal correction could retrace this entire 5th wave in a hurry, as commodities just love to create fast unexpected corrections.  Remember, when any bullish phase moves higher, sell stops start to pile up below present prices. When they get triggered things can move pretty fast.

The Gold/Oil ratio is still decent, but it has compressed a bit more everyday. In 2014 the Gold/Ratio shifted to 17:1 just before it started to crash, so maybe 20.66:1 will do the same thing. If I’m correct, then the Gold/Oil ratio should start expanding again.

In this case oil can fall back down to our  previous 4th wave of one lesser degree, which would be close to the $40-$50 price range. That would mean about a $20 price drop from todays levels. Oil crashed along with the stock markets in 2008, so oil crashing with stocks this time, would not be that much of a stretch.

Sure, we could get more upside, but the combination of a triangle in the 4th wave, followed by a “thrust” sure has ominous meanings.

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Crude Oil Daily Chart Bull Market Update

If there is any doubt from the public perspective, if oil is in a bull market or not, then this rally to $63 should help to dispell that. Of course the herd took about 2 years before they figured it out. The $60 price level produced some resistance, but now seems to have barely worked past it.  Oil should still correct, but it can do this very suddenly, and freak out all the oil bulls again. This last surge to the upside is the result of the previous correction, but diagonal wave structures can create havoc in forecasting any future price targets.

We need another price target as the $60 price has been achieved. Oil also wobbled around the $55 price level and the next even Fibonacci number would be $89  oil. Just in case that is not enough, we can use $115 and then $147. That would force a degree change in my present wave counts, but that is to be expected with such an ugly oil bull market start.

The Gold/Oil ratio is compressing a bit all the time, but nothing to get really excited about at this time. The Gold/Oil ratio crossed below the 21:1 ratio, but that is still a far cry from the 9:1 ratio we had at the top of 2008. If the ratio changes dramatically, in a short period of time, then a bigger bull market correction could happen.

The previous 4th wave dip is between $58 and $56 USD, which could turn all the bulls bearish again, when that illusive $60 price level doesn’t hold.

I know I give price projections, but the price is just for public consumption as the whole world works on price. The pattern is far more important than any price forecast as when we can identify any 3 wave decline, we know that the market will retrace the entire move from where this specific  “A” wave in question, started from.  Everything is relevant to the largest degree, we think we are working in.

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Crude Oil Intraday $60 Resistance Update.

At this time I’m still able to keep my wave degrees alive, but I know it will need adjusting again in the future. Gasoline displayed any “E” wave as a new low, but crude oil did not. We certainly got the “thrust” that usually follows any triangle. It will also force another degree change, if I like it or not.  For now, another correction seems to be in progress, which may not be finished just yet. We could get a sharp downward move yet, but spikes to the downside are bullish moves in a bull market.

With all the wild moves in gold and oil you would figure that the Gold/Oil ratio would dramatically change but in reality, it changed very little. The ratio today is 21.71:1 which has been floating between 21-22:1. Some analysts have made wild crude oil price forecasts already, but all the crazy future price forecasts you will read about, mean nothing if the Gold/Oil ratio suddenly shifts to below 10:1. This could happen at $89 or the $115 price level.

All the oil bears have been repeatedly demolished as the bull horns do their job. When the markets go up after repeated bearish calls, then this is a clear indicator that oil is still in a bull market.  When that situation starts to reverse, then any oil bullish phase will start to come to an end.

The big oil crash from the mid 2008 peak to the early 2016 bottom, sure can fit as a zigzag, which means that eventually crude oil will retrace its entire 7 1/2 year bear market.

Crude oil stopped just a bit under that $60 price level, which has been a resistance price target for some time. Eventually crude oil will break free again, and soar towards that $89 price target.

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Crude Oil Intraday Update: Up, Down, And Sideways

It may not sound right to many people, but technically, charts can only move in one of three main directions. North, South, and East. When a trend has soared North, we have 2 directions remaining where oil can go next. When it goes sideways, it’s in the process of switching directions. Which trend line will oil hit first? The top one, or the bottom one?

The wave count I’m showing is short term bullish, if a diagonal bullish phase is in progress.  I try not to present many alternates on one chart, as I have to use many of the past wave positions as a reference, for a new wave count. I checked the Gold/Oil ratio and it has compressed  to just a bit below 22:1. This may be due to the fact that we are in the February 2018 contract month, which usually smooths out over time.  Now if this ratio suddenly moved to say, 20:1 or 17:1, then we may be due for a longer correction.

The bearish move can still happen, so the bottom trend line would get sliced in two, once oil charges below $55.  The $60 oil price  is a previous bear market resistance level, so it stands to reason that oil is giving the oil bulls a hard time. I mentioned it many times that bull markets end when their charts are pointing up, but this is not one of those times. The vertical move would be obvious on a weekly or monthly chart as well. Far more bullish media would have to be present, which are still missing today.

Some analysts are calling for a very bearish $40 oil market in 2018, but I don’t see it that way at all. Any bearish target is worthless information if oil does crash to $40 but then drives to $89-$115 or more.

The idea is to never waste a bull market in asset classes, but being late chasing a bull market is not what I mean. I like it better when the markets make a firm commitment in one direction, as after that we usually get a soaring reversal.

Any zigzag or flat that is pointing down in a bullish phase ending with a C5 wave, will get completely retraced over time. Since the crash from the 2008 peak looks like an “ABC” pattern, then eventually crude oil should rise above $147 highs.

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Crude Oil Intraday Gyrations With Oilcoin Commentary!

This is the January 2018 crude oil contract. It’s starting to look like a triangle at this time, or a zigzag to a new wave 1-2 can also work. The triangle could head back down to the $55.20 price level so in the short term we could see some more bearish action.  Elliott Wave triangles do not show up in any wave 1-2 positions, they can  show up in “B” waves and any 4th wave. 

I’m sure the oil bulls will freak out when a deep correction happens, as bearish news could dominate,  as the oil price takes another hit.  It is harder to gauge the bearish mood during intraday corrections, but we have to keep in mind that a much bigger crude oil bullish phase, is still going to come.

Any big bullish phase that’s still to come could take all of 2018 and then some,  for this oil bull market to play out.  If we bring the same mentality to the oil market like there is in Bitcoin,  then any emotional commodities investor will get burned. Commodities are extremely cyclical and these cycles happen much more frequently than they happen in stocks.  From my perspective, I will remain bullish until this entire oil bull market has completed. 

If oil goes to $89 or to the old record $147 (double top), is irrelevant at this stage of the game. All the bearish news they can throw at us will mean nothing, as bull markets do not end when the charts are pointing down. They end when all the experts are in agreement, and are painting us  a wonderful picture with the oil price going much higher.  This may be hard for the majority to understand, but for the seasoned contrarians it’s all old school stuff.   A seasoned contrarian is someone that has been through 3 or 4 bear/bull cycles and has benefited from each one. 

For Bitcoin Zombies, staring at their mobile device, they will be happy to know that a potential “Oilcoin” is being developed! Yes, another ICO  joins the pack of 500 other coin offerings.

The Gold/Oil ratio is sitting at about 22:1, which changed little in the last month or so.  This ratio would have to compress much more before oil gets into an over-bought condition. 

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Crude Oil Intraday Gyrations Review

In the future I may have to knock the degree level down by one, but for now I will leave it as is. What looked like a simple correction could turn into a correction much deeper than originally expected. Since the June 2017 low, crude oil charged up on what can only be described as a diagonal frenzy. The entire rise until the $59 price level, ended up being about $15. A 50-60% net retracement could get  us to about the $50 price level. There is a nice previous bull market dip down there as well, which can offer some great support.

The Gold/Oil ratio is hovering around the 22:1 range, which is still far away from being expensive at this stage of the oil bull market.

As the oil market declines this ratio should spread.  This $60 resistance price level has a big part to play in any impending correction, but if we get a very bearish bottom, then the next leg up would certainly break past $60. 

Many analysts are calling for $40 oil, but we may never see that even with this impending decline.  The worst scenario would be a long drawn out sideways pattern or a triangle. 

The entire chart history of oil starting back in 1850 seems to be a diagonal wave structure, certainly not a picture perfect impulse pattern.  I work big charts from printouts and all I can see at this time, is that oil only has 5 waves in Cycle degree.  After the 5 diagonal waves in Cycle degree are found, then I have no clue what could happen next.  I love working on large, long term charts, but I will never do them in the computer.  We learn nothing by painting a bunch of numbers and letters in our computers, mainly it’s because many are just too lazy to go back and find their mistakes. 

 

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