Crude Oil

It’s now obvious that crude oil has started to back off or decline.  What shape this decline is going to be is unknown but a bullish correction can retrace by about 60% of the entire bullish move. Many times we can just eyeball it to give us a quick look which looks like it could be at about the $53-$55 price level.

We do have a little spike forming already but crude oil will have to produce a much bigger spike before I’m convinced that crude oil is going to soar to the moon.

Crude oil is the commodity that is destroying the world yet it supplies about 80 percent of all the food we eat at our dinner tables. The war on fossil fuels seems to have picked up lately as some countries are on the verge of declaring a “Climate Change Emergency”.

I’m sure declaring any “Climate Change Emergency” in your local area will keep the tourist away for a long time. That’s just like yelling “Shark” at the beach during spring break! I guess the countries that are yelling, “Climate Change Emergency”, have never watched “Jaws”!

For now, the commercial hedgers do not paint a bullish scenario as they are still net short by a large amount. Until I see some of these numbers reverse I have to keep looking for a bearish wave count.

The Gold/Oil ratio improved lately but at 21:1 crude oil is far from being cheap, so wild fluctuations can keep any oil bears on his toes.

Hits: 1

Crude Oil Weekly Chart Impending Correction Review?

This is the June 2019 contract where oil has just crossed the 50-day MA line which should give us some resistance. Crude oil shows a golden cross has formed in 2018, but it happened about 26 months after the 2016 bottom.

Crude oil would have to keep soaring to avoid a death cross from forming. Crude oil would have to crash well below $51  for the 50-day MA to cross the 200-day MA again. The $51 price level is also very close to a 60% correction so anything can still happen.

Commercial hedgers do not support the bullish herd, so its just a matter of time before oil will show us a correction or a crash that can take oil down to the previous support at the $45-$44 price level.

A complete retracement of the 2019 oil rally, would confirm that the 2019 move was just a bear rally. I’m looking at oil from a triangle perspective but could abandon that idea if a huge spike to the downside were to develop.

I track the gold/oil ratio and might make 3-4 calculations every month while in April I made about 6 calculations. All of April the Gold/Oil ratio averaged between 19-20:1 which is the most expensive readings I show since November 2018, about 6 months ago.

The 20:1 ratio seems to be a Gold/Oil ratio price brick wall which should start to spread again, once oil decides that this run has gone far enough.

The global warming alarmists should be jumping for joy that we have high gas prices at the pumps. Right?  Well, it’s not rocketed science folks but talking to local retail gas station staff, the feedback is people are not happy campers when in BC we could have one of the highest pump prices in the world.

The blame game continues as our fearless Prime Minister is blaming high gas prices on our BC government!

Hits: 15

Crude Oil Intraday Triple Top!

For the last 3-4 days, WTI crude oil ran into the $64.70 price level about 4 times since the December 2018 bottom. The entire 2019 bullish phase has been choppy and seems to have a slight  “Wedge” shape to it.

Crude oil could still turn into a triangle and we would be heading down to an “E” wave if that was the case.  $63.20 could be a bullish support price level but if the bigger bearish picture is true then $63.20 would just offer temporary support.  One day crude oil can soar and then the next day oil can drop like a rock.  Crude oil has been moving to the point where the analysts are having a tough time trying to figure out the real trend.

Just because some asset class is going up does not mean it automatically is in a new bull market.  Big bear market rallies can do exactly that but to confirm this, crude oil would have to crash well below the $44 price level.  We could have a long wait before that happens.

There are no daily limits on crude oil moves, so when it starts to act bearish it can move with stunning speed and price distance traveled.

The 2008 crash is a prime example of how fast prices can move.

 

The commercials are still net short by a wide margin which tells me the commercial hedgers have a bearish outlook which makes chasing a big bullish wave count a futile endeavor at this stage of the game.

The Crude/Oil ratio sits a bit above 20:1  which it has done only twice in 2019 and all in April.  I call this “Hitting a Gold/Oil price ratio brick wall”. At a 17:1 ratio,  oil has had no problem in crashing in the past but the ratio could still get worse in the short term.

Canada is a prime example of how the “War” on oil is being executed by forcing the “Carbon” tax onto the provinces that don’t want it. Here in BC, we had a big price jump at the pumps which will drive people across the border to get cheap US gas. My friends that drive to work are not happy campers and I’m sure higher gas taxes at the pumps does not increase the demand.

80%  of the world runs on fossil fuels just to keep the lights on, its more like keeping the Internet up and running. 5G and Bitcoin mining requires huge amounts of electricity that solar power can never supply.

 

 

Hits: 9

Crude Oil Monthly Chart Death Cross Review

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

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

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

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

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

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

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

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

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

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

 

 

Hits: 12

April Crude Oil Daily Chart Review

If I was a conventional wave analyst like the majority I would turn this into a bullish wave count with little effort. Easy wave counting is for suckers that have nothing better to do but count every little micro mini wave structure which we need an electron scanning microscope to see. Most all my wave counts that I’m after are three-degree levels below Cycle degree and three-degree levels above Cycle degree. Besides that “All” commodities run with idealized diagonal patterns that few wave analysts use.

The bull market from 1999 to the 2008 peak is a prime example of how forcing a 3 wave bull market into a 5 wave bull market can keep us chasing our tails for decades.  Any crude oil wave counts only started in 1850 which is close to the Grand Supercycle degree wave 1-2. Before 1850 the world ran on whale oil until they were hunted to extinction. The majority do not realize that without this energy source our present world could have never been built.

In a few years time, you will never even see these intraday waves and we will never know if an expanded pattern actually happened. Besides that, all the Miniscule wave counting is worthless if we can’t see a big crash or big bull market coming.  They say you can’t time the markets and to some extent they are right, but any investment is only as good as it’s timing.  The 2016 low was another prime example as analysts were forecasting that lower oil prices were still to come. Yet crude oil bottomed at about the $28 price level and then started to soar. Next thing we know investors started to jump on the oil bandwagon as $100 oil forecasts started to become popular again.

I use the gold ratio frequently which gives strong hints when some asset class is too expensive or is to cheap when compared to the cash price of gold. The cheap ratio in 2016 hit 44:1 which is the most extreme ratio that I have ever recorded. I was bullish before oil hit a bottom until this ratio started to shift again. The magic expensive ratio number in the past hit 17:1 twice and oil turned and crashed each time. Today, and since January 2019, this ratio has been averaging just below 24:1. This April contract is sitting at 23.81:1 and for 2019 seems to be hitting the 24:1 Gold/Oil ratio brick wall.

As I post, oil is still heading higher just above the Fibonacci $55 price level and at the very least we should get a strong correction.  Oil is still under the sign of the Death Cross but found support at the 50-day MA for now. All it takes is some fake fundamental news to get published and all these bullish traders can turn into instant bears. The world is changing folks, where false news or propaganda and Artificial Intelligence (AI) brainwashing is becoming normal. What the movie “1984” showed us would be a Sunday picnic compared to what is already happening.

 

Hits: 13

Crude Oil: Another Spike to the Upside!

 

Another crude oil spike this morning can be a sign that another correction is due or spikes can also be the end of the entire trend. It now looks like I have 5 waves up, which can be part of an expanded pattern. I kept the wave counts small but chances are good I may need to change it at a later date.  We could get a correction back down to the $49 price range but if crude oil travels.

Many times 5 waves like this make a run and we can get excited about another large leg up in oil. Many times we can get fooled especially in an expanded 5 waves.  A wild move that completely retraces the $42 price level will confirm that this move was just another bear market rally.  Going long at this point is a FOMO move and chances are good your bullish bet will get stopped out pretty quick.

The Gold/Ratio has also become more expensive as we are at 23.81:1 today. 17:1 will put us back to where oil would become extremely expensive again when compared to gold.  A large zigzag decline is not of the table but we will not know that for some time.  If the present Gold/Oil ratio stays the same for a few weeks then it could be hitting what I call the “Ratio Brickwall”

We also have a very convicing H&S being set-up at the $54-$55 price level so anything can still happen in the next few weeks.

Hits: 16

Crude Oil Intraday Bounce Update

My last posting price bottom did not hold for very long, maybe this crude oil bottom will last a little longer. This is the March 2019 intraday chart which can have completely different wave patterns. I look for the next busiest month contract which might have a slightly different price. I think oil is in for a bigger bullish phase but that might happen next year. In more move up and another move down would help to complete this wave count, which are diagonal wave structures.

Yesterdays Market Vane Report showed only 35% bull present. This is low but not an extreme just yet. The gold/oil ratio is a bit more telling as it registered 26.44:1 this morning. This is a record Gold/Oil ratio, in all of 2018. Getting close to the year-end also helps.

The fundamentals have been distorted and change at a whim as it seems every producer around the world is trying to manipulate the price of oil back up by cutting production.

Our oil policy is so screwed up that our government has tried to kill off our oil industry which got Alberta mad as hell. Then Prime Minister Justin Trudeau throws $1.6 billion cash at Alberta. Our government has no respect for the tax burden on ordinary working folks while the government drops cash out of a helicopter. Alberta has the upper hand here as cutting production will also cut oil revenues going back to the government.

 

Hits: 17

Crude Oil Intraday Chart: Bears Still In Control!

This morning WTI crude oil hit  a bottom  of $47.84 after which it started a bit of a rally. Since the December peak crude oil has been grinding down with many overlapping waves that I can’t count as impulse waves, but they sure look like they can fit into diagonal waves.  If we just bottomed then another zigzag rally should happen. This rally has no speed limit to it, so it can take its sweet time if need be. The only thing oil can’t do is soar above my wave 2 in Minuette degree.

The Commercial hedger COT report still shows that they are net short by a wide margin which hints that a super bull market in oil is not about to materialize this morning. We are dealing with wave position “unknown” to us most of the time. Fundamentals are also unknown as every country around the world is fudging its own oil related numbers. This is all about the process of eliminating wave counts that just don’t work. I manged to get in a couple of short trades on the way down but hesitant to go long with anything but a very small position. Even this mornings bottom may not hold, so I will wait it out.

The Gold/Oil ratio has improved with this recent oil price drop, but can still get much better. The Gold/Oil ratio sits at 25.65:1 which is much better but still far from being extreme. We don’t have to hit a new extreme ratio, as hitting the “Ratio Brick Wall” will do the same thing.

Hits: 7

Crude Oil Intraday Gyrations Update

Are we having fun yet?  Trying to figure out where oil is going next is always a challenge but I sure don’t think that the bearish situation is completely finished just yet.  One clue is that the waves are still overlapping each other which are signs of a bearish rally still in effect.  Another thing worth mentioning is that crude oil is just below the Fibonacci number 55. This support could fail before my digital ink even dries, as a move up or even a bit above $55 could still happen.  I have to run two sets of wave counts for oil, but both of them can be the same for most of the trip.

The Gold/Oil ratio has improved a bit recently at 24:1. This is not nearly close enough to be considered extreme but it’s making progress.  The Gold/Oil ratio only got better during November and we will have to see if it is running into a price ratio brick wall.

I would turn very bullish if the commercials were in a net long position, but they are far from that which will keep oil prices from running away to the moon. The fundamentals in oil change so fast which makes them worthless as well.  Did fundamentals give you the confidence to short oil in early October 2018? The experts were calling for $100 oil at that time. The October 2018 peak was one of most lopsided trades in the world as everybody was leverage to the long side and that didn’t include any COT positions.

The crude oil Death Cross on the daily chart happened closer to the $65 range, and oil would have to rally for a very long time before it creates a Golden Cross.  All my futures contracts that I follow are shifting or have shifted, into the 2019 year.

 

Hits: 11

Crude Oil Daily Chart Crash Update

 

 

In the last few days, crude oil did create another record bottom low of about $49.41, after which crude oil soared and so far has created another bullish set of 5 waves.  As I post crude oil has created another higher low, and it will be important to see if it the crude oil price will hold. I would like to see a counter rally of some sort, but a rally lasting a bit longer than just a few days.

A crash this long and deep sure has the potential to be part of an “A” wave as another 5 waves down in Minor degree sure might have a hard time as there may not be enough room.  Even a zigzag decline can crash to new record lows but that remains to be seen.

At this time the record low has a Gold/Oil ratio of 24.18:1, which is getting cheaper but that doesn’t mean we are at an extreme just yet. A Gold/Oil ratio of 30:1 would be better, but if crude oil rallies in the short term, this ratio will start to compress again.

The storage and pipeline networks have seen some extreme fluctuations, which in the longer term, will distort any supply-demand picture that is forming. I don’t rely on supply-demand numbers as there is no honest reporting that we can count on. If we think we are getting honest numbers from, Russia, China, Iran or any other dictatorship then we are just fooling ourselves.

The last month of the year could put supply numbers in focus again as the holiday season could kick in driving and flying plans. Until the airport gets buried in snow and all flights get canceled.

 

 

Hits: 8

January Crude Oil Weekly Chart Update.

 

So far the oil crash has been un-eventfull, but analysts make it out like it’s the end of the world. The talking heads will always find a reason, “Why” oil or any asset has crashed because it’s their job!

The news is all about fundamentals, but fundamentals are always lagging indicators and change like the wind just as fast.

The fundamentals I find important is the COT (Commitment Of Traders)report, Market Vane Report, and the net long or net short positions of the traders. Right now, oil is just a bit above the 200-day MA.

Today the Gold/Oil ratio hit 22.41:1 which is the cheapest oil has been all year when we use gold as money.  At 22:1 this is not nearly extreme enough to expect a huge rally to bounce from, as 30: would start getting close to being oversold.

China Inventories Rise 416%

That is a big jump in inventory levels, but it’s more profitable to store oil at low prices as the smart traders that do that use big crude carriers as floating storage units. That usually happens near a big glut, which I don’t see just yet.

If by some odd chance that the world calls it an “Oil Glut”, then I know the oil bearish phase is over, and a new bullish phase will start. You may laugh about that, but its not rocket science folks. The first glut in late 1999 turned $10 priced oil into a $147 oil price by the 2008 peak. The experts went nuts in 2008 forecasting huge price gains still to come, but what really happened is the oil price reversed and crashed to about $34! During that same time, oil traveled from a Gold/Oil ratio of 25:1 to 9:1 in about 8 years.

Oil markets have always moved in the opposite directions than what the fundamentalists are telling us! All the squawking about $100-$300 oil just being around the corner has dried up!

The smallest move up in the price of oil can bring back any $100 price forecast very quick.

At the intraday scale, it sure looks like a potential expanded pattern is in progress, where some violent upside can still happen. I don’t think this decline is resolved, as another zigzag may yet develop but it’s still too early to tell.

 

Hits: 13

Crude Oil Crash And Rally Update.

Crude oil created a fast move to the downside which usually happens just before another turning. On the daily chart this left a nice spike and the potential for a turning as oil bears could be in a small bear trap. Crude oil stopped dead at $54.90 and has now been in a rally that may not be finished. We could have  landed at a potential “A” wave in Minor degree, but we need time to help confirm this.

Any “B” wave can be a flat type with the first move being a zigzag. Two zigzags back to back and then 5 waves up in Minute degree could finish this rally. That’s if we were in a perfect world, as oil could drag out going sideways in a triangle nightmare as well.

What I really noticed shortly after the oil bottom on the 13th, was that the amount of bearish news just exploded and became, “Intense”. Opec is freaking out as they try to cut production again. The oil world is in such a turmoil state that fundamentals can change very fast from one week to the next.

https://www.cnn.com/2018/11/14/business/oil-prices-opec-what-next/index.html

One announcer called it the end of a 10-year bull market in oil! What? It was early 2016 when we had our last world oil glut which is not even a 3-year bull market.

The Gold/Ratio got a little better but is only a bit over 22:1,  which is nowhere near any extreme at this time.

Crude oil could also slip to a new low but then reverse just as fast, as an expanded bottom can still happen as well.

 

 

Hits: 11

Crude Oil Daily Chart Crash Update.

It could be a bit early, but I think a reversal is coming as crude oil is forming a great looking spike with this daily chart.

WTI crude oil price is also approaching the Fibonacci $55 price level and potential support going back to early 2017.  It could be a violent reversal as some fundamental news will come out and get the oil bulls all excited again. The $56 price level is a far cry from the $100+ price forecasts they did have. The Gold/Oil ratio improved nicely and is now sitting at the 21.42:1 ratio. Oil still has a long way to go before this ratio turns extreme, but in the short-term, a rally should ensue.

They have already declared oil in a conventional bear market, but from an EWP perspective, the entire bull market could be a bear market rally. Using stock market descriptions in the commodities markets is like mixing oil and water, they will not work if we don’t understand how big bear market rallies can actually get!

How high the counter rally could go is just the best guess, but $60-$67 will start to give crude oil some resistance. Wave 1-2 rally or a “B” wave rally in Minor degree would also work.

The crude oil price is still crashing as I post, so trying to catch a Falling Knife, will put you in the read very quickly.

Any choppy counter rally that we do run into would be a small version of a “Bear market rally”. The 200-day MA is at the $64 price level after which the Death Cross on a daily chart could also happen.

Hits: 31

Weekly Chart Crude Oil Crash Update. In A Bear Market Already?

 

One oil expert has declared that oil is in a bear market already!  The oil rout became a bear market pretty quick. With all the oil bear market experts hitting the front pages of news blogs, I wonder if they will tell us that the next rally is a bear market rally or not?  Close to a 3-year bullish phase sure had them convinced that oil was going much higher, but as usual, the markets seemed to behave the opposite of the herd! Every ridiculous extreme bullish oil price forecast was tossed around, yet what did the oil price do? It Crashed!

Since gold also crashed below short-term support, you would figure the Gold/Oil ratio would change. This morning the Gold/Oil ratio jumped back to a bit above 17:1, which still makes oil very expensive when compared to gold. This rapid change is nothing new, only that it’s hard to catch if you don’t take readings more frequently. When there is a fast move, then I use that event as a trigger to quickly take another Gold/Oil ratio reading.

What happened this morning, happened in 2014 as well, with the same ratio, just before crude oil prices imploded. That was a bit less than a 2-year crash when oil imploded from $105 down to about $28 USD.

There is a lot more crude oil downside that has to happen before we even get close when oil becomes cheap again. The only question is what pattern has the most likely chance of showing up to this bear party?  I have to keep 2-3 versions active at the same time. Even Crammer got into the oil forecasting business as he says oil still could drop to $40 before we see good support.

The big question is if this decline produces a zigzag, so common in commodities, or a set of 5 waves continue to develop.

No amount of bullish jawboning will change the trend once it takes hold or resumes, so keeping an eye on the COT reports or the Gold/Oil ratio is a more objective look at the oil markets.

Hits: 19

WTI Crude Oil Weekly Chart Review

 

I have made a few changes for crude oil, as I’m bringing back that a potential 4th wave bear market rally has completed.  Since the 2016 bottom, wild swings and overlapping wave patterns seemed to have been normal for oils bullish run. Technically I have no problem in making this fit as a 4th wave bear market rally, but time will have the biggest impact if it turns out to be true.

All sorts of reasons are being used to justify the recent decline in oil, but what good are these reasons when they constantly change. Not too many experts follow the Commercial hedger’s Commitment of Trader reports but the ones that do I find are more believable.  We are witnessing the results of a trade war where it gets to the point when the inventory of crude oil is piling up. Any news that inventory levels have dropped can send crude oil prices soaring. Even a 61% or more bearish correction may change my mind, but then I want to see a zigzag decline and not travel to new record lows.

This is just one COT report on Oil and the commercials show that they don’t see a huge bull market coming. Mind you the speculators most certainly do. Speculators follow the “Herd Theory” because once a small group turns bullish then all their buddies seen to jump in as well. This kind of action always puts the speculators in a trap, and in this case, they are in a bull trap.

The media reports the action of the large speculators as the smart money, which their not! I have notifications set up from Oilprice.com so this is about as real-time fundamental news as I can make it. It’s never about the stories but it’s all about the intensity of the news. If in one week only 2 oil bearish news article gets posted, but a month later there are 10 or more bearish news releases, then this has increased in intensity dramatically.

China-Turns-Its-Back-On-US-Oil

I would say this is one big reason why the oil price is crashing as the trade wars start to have an effect. Fear about Iran is also overblown as Iran can keep China well supplied.

The Gold/Oil ratio will give us a clues when crude oil becomes cheap again. Today it sat at 19.38:1, which is a bit cheaper in recent weeks but, not even close to being cheap when compared to the gold cash price.  A real extreme low was 44:1 back in 2016, so the Gold/Oil ratio still has to spread a lot! Until some of these numbers change, I have to remain bearish towards oil.

Hits: 35

Crude Oil Daily Chart Bullish Wave Count Update.

 

I have been working on all my long-term oil charts and I think that 2016 low is a Cycle degree wave 4 bottom, which means  this bull market has much more to go, but we could get a violent reaction as the Gold/Oil ratio is at 16.62:1, the most expensive reading I have so far.  A fast or violent correction in oil would change that ratio around a bit. If we continue then a ratio of 10:1 or event 8:1 may still happen. I changed my positions and started a 5 wave sequence in Intermediate degree, which could lead up to a Primary degree “A” wave.

All commodities have a diagonal idealized custom pattern I visualize, taken from the real world lcharts ike the CRB index.  A short example of this diagonal is the ending diagonal in our EWP books, but just forget the “ending” part and stretch it 600 years. The DOW up to the early 1920’s were all diagonal wave structures. This stopped as financial instruments were invented and the majority of people could own stocks. The more people in the markets smoothed all the diagoanls waves out.

Hits: 24

Crude Oil December Contract Intraday Rally Update.

 

A beautifull counter rally is happening but due to its vertical move, this rally can’t be maintained and must correct or even end this inverted zigzag. If the bears are in control of oil, then this little zigzag will get completley retraced. If this is correct then we will still see many of these bearish rallies develop during the rest of this year.

 

The commercial traders are about as bearish as you will ever see, while the speculators are in the biggest bull trap that you will ever see. This makes it next to impossible for crude oil to charge into some bullish phase that many analysts are still forecasting.  Fundamentals will “always” tell us the wrong things at the extremes, especially when the experts all are thinking alike! When they all sound or think alike, then chances are good it’s an instant short bet!

I also have what I call my “Ratio Pool” which contains about 20 Gold/Ratios in the ETFs I track. Nobody I know of keeps a ratio group of this size, and only with face to face meetings can this be explained in detail.

There is a mathematical connection in ratios that will never break, but they swing from one extreme to another. I sample the Gold/Oil ratio 2-3 times per month, and my latest gold/Oil ratio has been at 17:1. This is already at an extreme as the Gold/Oil ratio has been hitting a brick wall for months already.

Even the Market Vane Report doesn’t confirm a huge bullish phase to come, even with hurricanes forcing a spike in the oil price.  As soon as any storm passes the oil price will start to crash again.

Hits: 9

Crude Oil Daily Chart: Impending Crash Review

 

Since the early 2016 low oil has been in a bear market rally in Intermediate degree.Many are convinced that the world is running out of oil and that higher price could happen at any time.

Folks we have a big triple top, which created two fairly large H&S patterns. This is about as bearish of a signal that you can get as Blendstock gas is looking much the same.  I checked for the Death Cross and it has not happened yet but is next inline to do so. That might not happen until crude falls below $60. On the monthly scale we have a different situation, where the Death Cross has already happened.

This is about as bearish of a technical signal you can get and fundamental analysts ignore them on most part. Fundamentals will always tell us the wrong things at the extremes, as commodities  always go the opposite way of what the majority think.

The Gold/Oil ratio is as close to 17:1 as we can get and that was the same extreme ratio when oil crashed in 2014-2015. You can stretch and compress any ratio, but you can “never” break the mathematical connection. I keep a group of about 20 Gold/Ratios and it gives me feedback instantly. When someone forecasts a crazy gold price like $2225 then at 17:1 we should have $130 oil.

Oil will most likely go below $12 before we will ever see $130 crude oil. Gold investors that think that oil can imploded while gold soars are in living in a fantasy world. The world is going through a deflationary crash and bear market, that nobody expects.

Oil topped 3 years before gold, back in 2008 and what you can see so far is just a big zigzag crash in Cycle degree, which is still not finished. KOL is another Cycle degree zigzag crash, as well as the US dollar has done. All conditions that were before the 2008 crash are present now, and worse.  You don’t want to be bullish on oil when it is sitting on a potential Death Cross.

Chances are good this world is going to get another oil glut and then when they all start to think alike, then the oil market will turn and soar once again. All commodities are connected with giant zigzags and oil is no different.  Any SC degree wave 3 peak in oil should not peak until 2041, so that is a long wait if you are an investor.

Hits: 27

Crude Oil Daily Chart Update: Bull Market Or Bear Market Rally?

 

This is the December Daily chart but it’s stretched to 1500 days back in time. I do this to always look for alternates that I may have missed. As far as I’m concerned the entire crude oil bullish phase is nothing but a big bear market rally. It’s an Intermediate degree bear market rally  and this low degree bear market rally is fooling all the hedge funds who at one point were so bullish that it was the most one side trade that good crude oil analysts have seen. It’s the emotional hedge funds that always get into a trap, not the commercial traders. Commercial traders work with the industry, while hedge funds think they are chasing performance, they are working themselves into a bull trap.

The Gold/Oil ratio has been bouncing around at 17:1 and it seems like this 17:1 ratio is hitting another price brick wall. In 2014 the ratio also hit 17:1 and that produced the 2015 oil crash. My entire “Ratio Pool” consists of about 20 ratios and I consider the ratios as in-house generated indicators or tool. Ratios always give us a reality check if they are calculated consistently.

When all the expert fundamental analysts all start to sound alike, then chances are extremely strong that they are wrong! They were wrong when they consistantly forecast $200-$500 oil prices which is what they were calling for at the 2008 peak. (3 years before gold)  At that time the Gold/Oil ratio was about 9:1 and oil had no choice but to crash.

Such a distortion will not clean up with a mere 10-20% correction, as it will take much longer for the markets to become even, and it usally gets oversold on the way down as well.

Of course oil investors are sitting on an impending Death Cross, but the 200-day MA is still at the $62.00 price level. The oil price has to crash below this $62 price level before the 50-day MA bends down and actually crosses. Gold  and silver are also sitting on a weekly chart Death Cross.  It’s not just about one crossing, as the entire investment world seems to be invested on top of impending Death Crosses.  We can also draw in a nice rising wedge in oil, which is another tool I use regularly even when I don’t post them. Oil could break to new record highs, but we’ll deal with that when the time comes.  Summer driving holidays are almost over and hurricane season has been pretty mild.

Trying to forecast where the price of oil is going with fundamentals has never work before and will not work this time as well. Markets always do the opposite of fundamentals as every glut ever produce, started a huge oil bullish phase.  The markets are never right, because the majority of investors cannot making money from the same majority they are mixed upwith.

There are only so many “Greater Fools” that can still arrive which my weekly Market Vane tracks.  Even at 50% bulls present, is still to many bulls. I would like to see less than 20% bulls present, so we still have some ways to go before that happens.

Hits: 10

October Crude Oil Update

This is the October contract and they all have different patterns for this 2018 top. Oil takes alot more work to get a decent position at this top, escpecially in trading the little Forex oil units. I have been short crude oil with real money for many months already and most of the time the short trade was in the green, except for the beginning. When I talk about being in the green, I always mean it’s to the good, regardless in what direction I have bet on. Some readers may not understand the concept of trading up or down, and they will never do it.

To be blunt, not knowing how to bet both ways, only allows you a 50% efficiency rate at best! This rate doubles if you can bet down just as easily. When any trade is all green in Forex, then you even get paid some interest for staying in the green.  I do not give out Intraday day trading setups as you will have to find that somewhere else. I trade between Minor, Intermediate, and Primary degree turns, that can take  8-13 months to play out.

The crude oil market is one of the most skewed trades that I have seen since the 2008 peak and crude oil will eventually crash right along with gold and all other markets as well. You can’t seperate oil from gold as they are intricately linked with the Gold/Oil ratio. Ratios are just glorified ways of producing odds, and knowing your odds is the what you must know, to trade in both directions. In the future I will not trade oil, as there are easier pickings in the gold sectors.

The Gold/Oil ratio was just under 18:1 which seemed to be hitting a brick wall all summer long. When oil started to crash in 2014, this ratio was also 17:1. There is no way that I would bet on long positions if they paid me. Then we have the Wedge sending us a clear signal as well, which they call a “bearish Flag”. It’s a rising wedge and they preceed any deadly bearish situation. One of the most deadliest indicators of a longer-term bearish decline, is the Death Cross! The Death Cross on this daily chart still needs to happen, but on the monthly charts the Death Cross has already happened.

In short the entire investing world are in long positions at the tops of Death Crosses, in all asset classes that I cover. A basic market decline/crash is coming and all those who are not prepared will get hit hard.

A bear market rally always retraces everything back down to it’s point of orgin, so only time will tell when this will come true. No little $40-$45 support level will hold for very long. Anything related to the heating and gas sectors, the Market Vane reports over 76% bulls still present. These are very bearish indicators as it leaves very few bulls to join in.

Deflation is going to be the real threat in the next three years, and oil and gold investors still haven’t figured that out yet!

Hits: 8

August Crude Oil: Will It Hold Its Peak?

You can automatically assume that commodaties are sitting on a Death Cross, even if I don’t show them. I will be reducing my intraday positions as I’m not a day trader, and have no desire to become one. I’m short crude oil in a small forex account and have not been urged  to take profit. Let the bet ride, as the support bullish trend line is not going to hold oil back for any reason.  Traders are starting to get very nervous with any small decline, but they ain’t seen nothing yet. Oil bulls are going to see “red” while the short player sees green. Shamrock Green.  🙄

There are a host of indicators all confirming the same thing, as the commercials are so heavy short that there is no way a super bull market in oil can even get off the ground.

This morning the Gold/Oil ratio was still getting close to 17:1, which means that the Gold/Oil ratio is hitting a brick wall. Of course our great Photo Bomb leader wants a carbon tax to help stop climate change. Carbon tax on oil is the biggest mistake any governmet can make, as it is based on falsified data from the experts. The people know this and the conservatives know they can form a new government, based solely on fighting the Carbon Tax. The world fertility crash will fix the CO2 problem, and my bet is that the CO2 PPM (410) will implode in the next 50 years.

Oil is in a bear market rally,and incase you don’t know what that is or means then I strongly suggest you do some research on it. A bear market rally “always” returns to the point of orgin and below. That makes oil at below $28 a distinct possibility again.

Hits: 22

Intraday Crude Oil Rally Update

Declining inventories is the reason why oil has rallied. Does the news automatically reverse a bearish phase? Highly unlikely as even President Trump  wants OPEC to increase its production.  This rally has all the charatristicsof an inverted zigzag which could be just another 1-2 wave.  There may be one more higher high but then we should see another reversal happening soon.  I’ve moved my degree level up again by one degree, and only time will tell if I have to adjust again.

Many experts are gungho on oil prices, but only when the price of oil goes up. When the price of oil starts to dip again, the analysts will bring out all the news why they think oil prices will go lower.  Analysts go with the flow, but in reality this is worthless information when we see the action in the charts.

Until oil shows a very good sizable correction then I may turn bullish. This may not happen until oil falls well below $50. $40-$45 would be a very good base for a turning or just a long resting spot.  The entire oil move since the 2015 bottom looks like one wild inverted zigzag, which are bear market rallies. This happens at all degree of trends with the above chart being a small example what small bear market rallies look like.  We had a Primary degree bear market rally which fooled the majority thinking it’s going to $200 again, yet the oil market crashed from $115 to $28. In just a few short years, the entire bullish phase was retraced. Sure oil created an “A,B,C” move but I think the Cycle degree dip has not finished by a long shot.

This morning the Gold/Oil ratio sits at 19:1 which is not all that cheap when we use gold as money. We want this ratio number to reverse and expand where oil can buy many barrels of oil.

Hits: 16

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.

Hits: 29

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.

Hits: 22

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.

Hits: 124

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.

Hits: 13

Crude Oil Intraday Gyrations Update

This morning crude oil also spiked to a new record before it backed off a bit. As I post a reversal is in progress so short term this recent high could still get retraced. The more violent, crude oil gets is the sign of a trend change that oil could be switching to. The price gap between this June contract and the December contract,  has compressed dramatically,  as the December contract is now only  a 65 cent difference.

The Gold/Oil ratio is also at record lows as it hit the mid 18:1 range since early April 2018.  Before oil crashed in 2014-2015 the Gold/Oil ratio managed to hit 17:1 so 18:1 is not that far away.  The entire world seems to be bullish on oil prices, as every price forecast imaginable is thrown at us. I’ve heard all this before  as this potential peak has happened two times before.  This will be my third oil, bearish phase I will be tracking and they all started with very high gold/oil ratios.

The WTI commercials are short oil, and even with the ICE futures they are in short positions. Until this scenario changes I remain bearish on oil.

Some only expect a pull back to $60 or so, but that is a very bullish corrective forecast. Even if oil is ending on an “A” wave in Intermediate degree, a net pull back of 50% can take us to the $40 price range.  A $10-$12 correction is peanuts, as that would not force too many oil bulls to reverse their positions.

Hits: 11

Crude OIl Makes A Swan Dive.

I extended my Minuette degree wave 3-4 with this run into last night being one ugly 5th wave. Early this morning crude oil started to implode, which was also a diagonal. Trump dumps the Iran Deal and oil implodes. Of course, all the forecasts for higher oil prices soon emerged with one forecast at $82.50. I laughed when I read that as it is another example of consensus forecasting.  This morning this June oil contract peaked at $71.80 and then started a decline.

Only time will tell if this peak will hold as my 4th wave in Intermediate degree might find a home for a little longer than just a few hours.

What is far more interesting, is what happened with the Gold/Oil Ratio as oil went vertical. We had a June Gold/Oil ratio managing to compress to a little over 18:61.

This morning the Gold/Oil ratio hit 18.35, which is still the most expensive ratio for this bull market so far.  As the crude oil prices decline further, this ratio will start to expand again.

This crude oil bull market is one of the most lopsided trade setups that I’ve seen in years,  as the professionals are geared for higher oil prices to come.

All these expert fund managers are already in, which has been reported on in great detail.  From my perspective, there is no one left to get in as the “Greatest Fool” has arrived buying into crude oil at $71.80.

The Gold/Oil ratio is a powerful tool as it works on a mathematical base, which the majority ignore. Many of these extreme oil price forecasts mean nothing if you just make a simple ratio calculation.  A $300 oil forecast would give us a $5400 gold price, which is not going to happen. A quick calculation will tell us that the $300 oil forecast is just a mythical dream, not based on reality!

Crude oil is very close to cracking the $70 price level again and that could be the trigger for “sell”orders to kick in.

Hits: 13

$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!

Hits: 14

Crude Oil Price Soaring To New Record Highs?

 

Crude oil is trying to break out, but it may not happen today. We  may have to wait until next week or during Sunday night trading session.  I’m squeezing out every degree level I have and only have one more left after which we hit rock bottom on my list of 15 degree levels. At such small degree levels I know that  I had a wave in the past that I missed.  This crude oil mania is being pushed to the limits as the COT positions are clearly telling us.

This June contract is still higher than the December contract which is not very bullish as well. Indicators that the majority of analysts use may be good for the short term, but longer term all trends must come to an end and the only question is when. Most of the time trends peak when I run out of degree levels to use. Anything smaller, I’d need an electron scanning microscope to see, never mind to try counting it out.  I’m very bearish towards oil and will remain that way until any major decline has started to kick in.

There should be a massive amounts of sell orders stacking up below present prices so when they start to get hit, a cascading domino effect takes place.

Even the Gold/Oil ratio touched 19:1 this morning, which is getting very close to the 17:1 ratio we had back in 2015 before it crashed. One report from a fund manager suggests $300 oil is doable, but all we need to do is take a quick inverse Gold/Oil ratio calculation, would give us a $5700 gold price. That little calculation gives you a good idea that the $300 oil price forecast is a figment of someones imagination.

As I post crude oil seems to have broken through to new record highs with a big intraday spike. That intraday spike probably triggered many of  the protective buy stops laid down by early short players. The jobs report this morning could have been the trigger!

In the end my 4th wave peak will get moved a bit higher, but this still is a pretty normal inverted zigzag for now. Yes, its a bit longer, but look what the another zigzag did from 1999 to 2008.

Many people thing that crude oil or even gold will not crash as gold/oil bull markets can work inversely to the stock markets. The facts are that during the 2008 crash gold, gold stocks and oil crashed together. I know because I tried to short GDX at that time, but got freaked out when it went against me.

To say that this scenario cannot happen again is ignoring market history, and if we forget market history so fast then investors will pay dearly for that mistake. As a wave anaalyst we have to jot down little numbers and letters so we never forget the past!   🙄

Hits: 23