Tag Archives: Oil

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.

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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!

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Crude Oil The Bull Market That Won’t stop!

 

This is the September month with oil just squeeking into a new high. The August contract scored a new high but all other contracts months are still far behind and lagging.  I believe an inverted zigzag is still in progress, as the wedge suggests. If we draw horizontal lines back to the bull market, then the $75-$80 price level is going to produce a stiff wall of resistance at the same time.  The $80 price level would also hit my wave 2 price range. In a pure impulse I would not allow that to happen, but in the diagonal world this happens on a regular basis. For over 500 years, Submillennium degree wave 3 has produced diagonal wave structures. Oil’s entire life span is also based on diagonals.  Modern wave analysts don’t care about diagoanls waves as they label everyting like simple impulse waves. Cheating in counting diagonal waves stands out like a sore thumb to me, and I reject any wave count that ignores diagonal wave structures.

Different contracts have different peaks, so this usually wrecks havoc with the wave count, at least in the short term.  Any “D” wave rally can look like this as well, and most of the time you will never know the difference, because the mood in a wave 1 and a “D” wave are much the same.  Every bear market rally we will ever run into, has a bullish mood attached to it. The majority will never learn what a bear market rally is, so we get sucked into thinking that every bull market is going to send prices to the moon.

At the 2011 peak everyone thought we were in a bull market, yet complete retracement ensued.  Gasoline futures are not following as they are lagging substantially. At about the 2014 peak the Gold/Oil ratio quickly jumped to 17:1 after which the oil price imploded. In the last few days this has happened again as oil pushed to 17.24:1 this morning.  If oil stayed in the same spot and gold keeps crashing, then oil would still get more expensive and it doesn’t even have to move.

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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.

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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!   🙄

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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 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, Powering Higher, With Gold/Oil Ratio Commentary


Crude oil has powered higher, and now contains a vertical move. Short term, there may be more to go, but if the zigzag bullish phase is close, then we could see a correction sooner than we think.   Crude oil is still far away from crossing that $58 price level of this December contract, so I won’t be a happy camper until it does so.

One thing that did happen this morning the Gold/Oil ratio shifted to the expensive side at 23.57:1. This is about the second most expensive time since the start of 2017 and it would have to beat 22:1 if it wants to make a new record ratio high.  This is nothing to get all worked up about as the Gold/Oil ratio would have to compress much more. Any correction may bring it to the 24:1 range again, which seems to be normal at this time.

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Crude Oil Intraday Bullish Phase Update

Crude oil has shown that It wants to keep going up, but what a hell of a choppy ride it has been so far. Since I’m working another potential diagonal my waves can overlap very deep if it wants to. With a potential war breathing down our necks, I can understand the bullish sentiment towards oil. I started the top wave count as a “B” wave, but when I was editing the chart, I saw what looks like a potential triangle.   I could see a triangle in a potential 4th wave, but it is a very small degree level and should not do to much damage once the “thrust” is played out. 

Even then the 5th wave would be another zigzag. If oil travels much deeper, and takes longer in time to play out, then I will have to look for an alternate wave count. This is nothing new as with crude oil I’m constantly looking for alternate wave counts. 

Crude oil is having difficulty at the $51 price level, but for oil to show us what it’s got, the $55 price level must be exceeded. Crude oil soaring past $55 helps to confirm that the 8 month bear market in oil had been just a correction, in a bigger bull market yet to come. Longer term $89 is still a good price target, for now! 

I measured the Gold/Oil ratio this morning, which was 26.04:1.  This is still very decent and nothing to worry about. I think we may see 20:1 when this bull market gets over bought, but in desperation oil could also see 17:1 or smaller. This ratio has to compress as it becomes more expensive compared to gold.

I don’t consider crude oil as Black Gold because eventually oil goes out the pipe of a car  as a greenhouse gas and disappears. Much like paper money does today.  😉 

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WTI Intraday Bearish Mood Review

Oil has now fallen further than what I would like to see. I have been staring at the blank crude oil daily chart to see if there is a better fit. All my wave counts that I had in Minor degree, are now bumped up one degree.   I have tried this before so basically I’m using a wave count from inventory with a few updated adjustments.   It was that secondary top, that I now have to call it a truncated (shortened)  5th wave of a diagonal. That short top is a potential 4th wave top in Minute degree which leaves us with a potential decline to new bear market lows. 

I do have a set of nice 5 waves going down, followed by a violent rally that sure could work as a zigzag ending at an “A” wave in Subminuette degree. Down from that “A” wave, we now are faced with another low. At this time the chances are good that an expanded zigzag has formed, from which oil could blast upwards traveling well above the “A”wave peak. Since this looks like a 3-3-5 we could end up at a “B” wave top  followed by another set of 5 waves down. 

It may all be wishful thinking, but moves like this happen many times. At $43-$41 oil would come up to serious support again as it completes another zigzag.  It sounds like an ugly picture, but it should be shorter term only. Obviously, Hurricane Harvey had a huge impact with many of the refineries shut down and unable to open. We see the huge spike in gasoline futures as those inventories plunge. Have no fear, Europe is all geared up to send refined products to the USA. Mexico gets its gasoline from the USA, so they will feel the pinch as well. The US is not only an importer of oil, but it sells a lot back to other countries that need the light sweet crude to mix with other heavy crude oils.  There is a lot of turmoil in the world as oil production has dropped due to fires, bombs, hurricanes and just plain bad management. All this could suck down inventories very low, and one day the herd wakes up to this,  and suddenly we have a shortage. 

The Gold/Oil ratio became a bit more expensive this time at about 26:1. It’s still well within the average range of being cheap. If and when we consistently start to push closer to 17:1 or so, then we may have to take another hard look at how our wave count is looking, at that time. 

Oil may hold at $46.60 in the short term, but the entire wave count could fail and continue heading south.  Any anticipated rally should happen sooner than later, as there is not that much room left to wiggling around. 

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Crude Oil Intraday Corretion Update

In my last update I was a bit too early calling a 4th wave bottom. It now appears that a regular flat may have developed, after which we should get another leg up.  Since oil may be in a flat like pattern, then we can watch out for a 5th wave extension.

Waves 1 and 3 are about even so that  is another reason that the 5th wave can extend. You will never find all those pretty idealized waves they show us in the book as nothing in the EWP is even. Even zigzags can stretch dramatically, as it did in the 1929-1932 crash. At the $51 price level, we will meet a short-term bearish trend line, but I think crude oil will slice that trend line fairly easy. 

The next big price hurdles that oil will have to take out, is $55 and then $58. Once it clears $58 on my charts, then oil will be in new territory. Breaking that $58 price level will also confirm that this crazy bear market was just another correction.

The Gold/Oil ratio was a bit cheaper this morning at 26.24:1. This is not anywhere near any extreme, but is still rather on the cheap side, when we compare it to gold. 

I have very little downside room to move before it dips into my previous wave 1, so if and when it does, I will have to review it as a diagonal wave pattern. 

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Crude Oil Intraday Rally Update

In the yesterdays oil post, I saw that I made a huge mistake by flipping one degree level. It should be a Micro degree wave one and not a Submicro degree wave 1.  The “C” wave was labeled one degree higher than the wave one was, which must not happen. 

Either way,  we are ending at another potential top, at least in the short term. This could also be another sucker play, that could fit into a 4th wave triangle, so the next anticipated correction could surprise us. Another zigzag, heading down would help to dispel those fears.   When the markets are weak corrections can go very deep and in this case, any previous 4th wave of one lesser degree, could bring us to the $42.50 price level. 

I have a very short diagonal wave 3, but the 5th wave sure seems to have made up for it as that last zigzag extended. 

The Gold/Oil  ratio, compressed a bit and is now sitting at 27.9:1. This is nothing to get exited about at this time, as a bigger oil bull market is still in effect.   

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Crude Oil Intraday Crash Review

There is a good chance that my entire oil degree level was out by two degrees at the 2008 peak. Then early last month,  we finished another crash before it started to build another 5 wave sequence heading right back up. The May rally looked like an impulse, but fell apart once it progressed. 

Once this bullish run was completed, then oil proceeded to crash yet again, which could have ended early this morning. It sure looks like another zigzag correction, complete with alternating  A5 and C5 waves. A5 is an impulse, while the B5 wave is a diagonal. 

Every zigzag or 3 wave crashes can produce another leg up, which will retrace the entire zigzag and then add on  much more. In other words, we still need waves 3-4-5 to develop.

I started with the lowest 4 degree levels on my list, making the wave 1 top a Subminuette degree. Once this run starts to materialize, and I still run into too many waves I no longer have degrees for, then I would bump up the degree level, one higher degree.

With a potential Intermediate degree 4th wave bottom in late 2015, we would think that we are going to get a 5th wave that will soar to the heavens, impressing us to no end!  I doubt that will happen, as oil is prone to developing into another zigzag where the C5 wave contains an extension. 

Just because oil crashed, does not mean it’s the end of  the oil bull market, as all crashes in a bull market are “ABC” patterns. “ABC” patterns create, the higher lows, as this is the description of a bull market.  In a bull market and after any 3 wave crashes,  the markets will always push higher.  

Not until crude oil becomes overbought again, will we need to worry about any return to a new bearish trend. 

I use the August contract above which may last about two months, before I switch again.  This also calls for a Gold/Oil ratio calculation, which surprisingly has improved. Today we are at a Gold/Oil ratio of  26.65:1 which is one of the best showings in the last two months.   

Any potential 5th wave can give us two types of patterns, and at this point it is still unclear which one that oil will take. One thing is certain,  it will take the rest of the year to confirm what pattern we will eventually get. In the short term all we can do is track, what we do have. 

 

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Crude Oil 2008-2016 Weekly Chart Review

I have been reviewing all my commodity charts that I cover, and at this point I have about 4 that have been worked. Changes like this should never be done on a whim, as it trashes many other wave counts that originated in the past.  I believe the 2008 peak in oil was still a wave 3, but now it is two degrees lower in Intermediate degree. 

If I replaced the 2008 top with a Primary degree wave 3, then this means that Cycle degree wave 3 would have to be moved back to the 1980 peak. I will not do that because in reality the oil bull market could have started back in 1986, not in 1999. We had a higher low in 1999 which I can fit into a diagonal wave two.  Counting from the 1986 low there is no way to force the oil patterns into an impulse, and no way were they “WXY” waves.  I use a strict rule, and that is that any “W” wave we think we see, must be a zigzag. Using a flat at a the “W” wave position cannot happen, as a flat would just connect the A5 and C5 waves together in a diagonal. 

Trying the wave 4 in Intermediate degree at the 2016 bottom, opens up more probabilities, which still needs work before we get a better grasp of what to expect in the next few years. The choice could be another diagonal 5 wave sequence or just one big zigzag in Intermediate degree. (3 waves in Minor degree) 

During the 2014 oil crash we had what I counted this time as a 4th wave running triangle in Minute degree. Our present bull market may only be in wave 1-2 in Minute degree. One single zigzag would be my best choice for oil, but with gold we could get 5 waves.

So far on the intraday scale, oil is making all the right moves and hopefully it will continue.  

 

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Crude Oil Crash Review

Crude oil has pushed south about as far as I would like to see for a wave 2 correction. It will be very important to see if oil does not keep acting impulsively, but starts to go sideways for too long, or turns very choppy too soon.  That would mean that the entire May rally could have been a fake, which would send oil to new record lows. This is my least favorite option but we have some time as another counter rally would get in the way.

The Gold/Oil ratio got better when I calculated it this morning, as it is pushing closer to 25.72:1.  This was the ratio level back in 1999, at the depths of the world oil glut. We all know what happened to oil after that, as it soared from around $10 to $147.

Back in early 2016 crude oil also started in a bull market right in the middle of a major world oil glut. Of course, all the experts were squabbling, how much lower crude oil would go. Again, oil proved the experts wrong, and when they believed that oil will never see $100 again, it will rally and go above $100, just to prove them wrong. 😛  “Groupthink” or consensus forecasting by the majority will never work. It doesn’t work with Elliott Wave and it sure does not work for climate change.

Anything that comes from the mouth of OPEC is never believable, as they can cheat and fake stats and find a way around Iranian sanctions. Does it make sense for Trump to want to sell oil reserves into a world oil glut? Talk about selling low?  

In the end, it would take very little disruption in world oil production or storage, to change the crude oil price dramatically.

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Crude Oil Intraday Crash Review

I was expecting a correction, but crude oil crash much further than what I was anticipating. When that happens then this forces an instant review, looking at it from a diagonal perspective.  Sharp crashes like this in a bull market, are very bullish corrections. It is when spikes reverse and they start to point up, when we can expect a decline. 

In a bull market, we always need higher lows, which are all made from any type of a 3 wave structure. Many of these market  spikes are more computer trading related actions,  as no human can panic this fast. Think of it as a small flash crash, as history shows that after a flash crash, the markets have pushed much higher.

Short term we are in some bearish action, but longer term oil has much further to go. The day will come when oil could cross the $100 price level again, just to prove all those experts that say oil will never go above $100 again. The markets have the ability to always prove the majority wrong as “Groupthink” does not work.

 

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Crude Oil Daily Chart, Crash And Potential Bear Trap Review

Another small leg was added to the downside tonight. In a flash, crude oil crashed right through the $44.50 price level and a bit lower.  As oil made the mad dash south, it created another long spike as well.  From the 2017 peak, the oil crash now looks like a zigzag pattern.   The A5 waves are about as diagonal as we can count them,  while the C5 waves were small and wasted no time in making long drawn out corrections. I see this as great alternation, and they seem to be pretty popular. 

We may get a bit more downside, but there is a good chance that crude oil is finishing a zigzag crash, and to make a long story short, I have to turn bullish with what I see.  I will try the “A” wave in Intermediate degree at this new location, and how long it will hang on to this position would be sheer speculation.

I think oil still has to go well above all the sideways choppy patterns we see, which means 100% retracement of this oil crash.  Technically, we may just be starting another “C” wave bull market, so if that is the case, then we get another chance at 5 waves up in Minor degree.

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Crude Oil Daily Chart Review

Since the 2016 top oil has been a problem child, as the sideways pattern has been pretty hard to establish a wave count with.  Just because oil crashed last week does not mean that the bull market is over.   Many more indicators would have to drop into place before we see an end to the bigger bullish phase.  Due to the massive leverage in all futures contracts, we can get a different wave count every time we switch parameters. This forces me to constantly look at oil charts in line type, to double check to see if line type shows the same as bar type.  Most of the time they do. 

This can cause fast moves that are very difficult to  count out.  In the long run the pattern will become more clear, but short term it looks like a diagonal wave 2 crash.  Any potential wave 3 up will not be your pretty impulse waves, as they can be painfully slow in getting going. 

This wave count looks the best right now, and I would love to see this bottom hold. In the end time will have to clear up these short term moves. 

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Crude Oil Intraday Bullish Review: Will It Fly Or Die?

 

 

When oil seems to be crashing it turns and soars again giving us little to work with in establishing any potential new trend.  This could go on for some time, so all we can do is look for potential “ABC” pattern that might give us a “C” wave bullish run.  Another “B” wave bottom may have happened on Thursday. Since I count out this top mess with a potential expanded pattern, then the price of oil should pass all tops and push to another newer high. 

Then we should expect another correction, which could be anything that this market can throw at us. From the secondary looking top the decline was a pure diagonal 5 waves which I counted out in more detail. Diagonals are found in many “C” waves so at least that part fits pretty well. Diagonals are positioning  clues in where we can be, but it is always specific to the degree level that we think we are working on.   

The above charts contain the smallest degree level, I have from the list that is in the blue book. 

In short, we could still see violent swings in both directions, but the long term bullish cycle is far from dead.

The Gold/Oil ratio is still a decent 23.20:1  and until that ratio shrinks dramatically the bullish phase still has room to move.

Longer term,  oil can move to the $89-$115 price level before it may be ready to die.  Mind you, all my contrarian indicators would have to show up as well.  

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WTI Crude Oil Bull Market Review

 

clz16-oct-21-2016

 

Oil ended on a high before it started another decline, the last wave sure counts well as another zigzag which could be the end of this diagonal type move.  This also looks like part of an expanded flat so another bullish phase could be just around the corner, especially if I  move my present “A” wave top back to the October 10th peak.  The gold/oil ratio has hardly changed  so that still keeps oil over on the cheap side of this bull market. 

There is still a lot of upside potential, but corrections will get in the way as corrections shake out all those that should not be there in the first place. Like speculators and traders that, just play with too much of their available net cash. They panic as soon as they see red in their accounts, as the fear of losing money, drives most of their decisions. 

The end of this month and the looming first week of November, can push these markets around in a wild fashion, so it will be very easy to get the intraday moves wrong before we ever get them right. 

Oil has been struggling to get past this $52 price level with this December 2016 oil contract. It  may even dip much deeper than we would like.

Overall, I am very bullish on oil and any correction can make investors think, that it is returning to a bear market. At every turning I ever looked at, when the fear returns and they all think it is going to go much lower, this is when it can turn and head north with a vengeance.  

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Crude Oil Daily Chart Review: Creating the Next Oil Shortage

 

clz16-oct-10-2016

 

I was going to start with an oil posting today, anyway, but now Putin’s big mouth created a surge in the oil price. Manipulation of the oil supply by any means necessary, as OPEC is trying to get its act together thinking they still have power. Talking the oil price up can work, but talking it down, also works.  When an excess supply report comes out, that would send the oil price down.  OPEC can try and squeeze the oil price, but the US drillers will just keep pumping and smile all the way to the bank.

In the end all this fundamental jawing just produced another spike on the charts, not any different than the thousands of spikes we have had before.  If we look at all the spikes and crashes, do you know what fundamentals came out that made each spike? Nobody will remember or have a clue what sends oil prices up and down, even though the majority of experts are fundamentalist, and they always give us a reason. 

Since the August bottom oil has not made any great impulse pattern, and it is coming up with a triple top as well. I still think an intermediate correction still needs more time to play out. I could see it if the oil price slumped back down to $40 or $38, as that would give it a small base to bounce from. It would be nice for the 2016 bottom to hold, but we have to wait and see about that. This bullish phase is still a big bearish rally as we could be heading up to a “D” wave in Primary degree, and that is just not going to finish overnight. I’m looking at a potential $89 price target when it gets to the big top trend line. 

The gold, oil ratio this morning was a bit over 25:1 which is not expensive by any means, so why should it crash to $21 or lower this time or this year!  

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Crude Oil, 1988-2016 Cycle Degree Review

This week is Cycle degree week review as I want the readers of this blog to know quickly that I am posting a new location for Cycle degree wave 3.  I used to run everything in GSC degree, and then in SC degree, but they did not work as well. The chart below is a linear chart so it enhances peaks, making them look more dramatic. 

 

clz16-oct-4-2016

 

This is the December contract looking back to 1988, and then forward to the 2008 peak. The 1990’s bear market is not a triangle, but it is the “B” wave that contains the triangle. It’s as good as a running flat. I have counted the 1990’s like this already, so it is not a stretch to do it again. Most certainly the 90s are “not” these mythical “WXY” waves that the majority sees.  The majority of wave analysts,  only see the easy wave counts first, but easy is not how waves run. They run in sequence to each other. In this case the 1999 to 2008 bull market is still a diagonal, but it would be a diagonal 5th wave in Primary degree, and not the forced 5 waves in Primary degree, that we have seen so often. 

If I have a Primary degree top, then I must also have the next higher degree as well. 2016 was a major low which resulted in a huge world glut, that some say is already disappearing as inventory levels have declined.

  Is The Glut Coming To An End? Cushing Stocks Fall To 10 Month Lows

The fundamentals change faster than the wind and get outdated or become irrelevant very quickly. Just because something is going up is irrelevant in the long run, as “How” it goes up is far more important.  Every “D” wave top is a a sell signal, but the trick is when this “D” wave can come to an end. With this new Cycle degree position it also changes the price forecast, which now makes the $90-$115 price level far harder to reach, “This time”. No, we are not going to $200 this time as that was the number that the majority thinks it was going to go, in the days of “Peak Oil”. 

If after oil does reach to the sky again, and I read or hear the words “Oil Shortage”, I will throw up and instantly look at another oil crash to come. Three bottoms would give us 3 world gluts since 2008, and the second bottom and glut,  is in the bag already. Commodities do not run like normal wave counts as they have a tendency to go sideways for many years. 

I still have many commodities to convert and move the Cycle degree top, and it is impossible to do all of them at once. The gold/oil ratio got a bit more expensive this morning, but it’s not a big deal just yet, as we are dealing with a December crude oil contract. When we get to another extreme, then it will be important to check the gold/oil ratio more frequently. 

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Comment On: Morgan Stanley: ‘’The Oil Rally Might End On Wednesday’’

Morgan Stanley: ‘’The Oil Rally Might End On Wednesday’’

Morgan Stanley is at it again as the expert fundamentalists forecasts the end of this oil run by the this Wednesday. 

Morgan Stanley: Oil To Fall To $35 In A Few Weeks

With this price forecast of $35 in a few weeks time, it must be exciting to get this level of accuracy with fundamental analysis. The issue is not the price forecast, as anybody can do that, but what is more important what the price of crude oil will do after it hits this mythical price level. Will it go to $135 after that? The thing is they can’t forecast until they are just about there in the first place.   All it takes is a hurricane coming in and all the rigs in the Gulf would be sitting idle. Are hurricanes fundamental indicators?  Of course, if this oil bull market is a fake in the first place, then oil will not stop at $35, as it would be more like $25.   

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Crude Oil Daily Chart Review: What Bottom?

 

CLU16-Aug-5-2016

Four days ago oil hits another bottom.  I would love to see that as a real bottom, that means anything but we have to keep our options open at this time.  At best another zigzag run would take us to about the $65 price level. This is not near enough to fill what price levels we would need to fill out a diagonal 5th wave.

Any potential “D” wave top would find resistance at $96. That is still a far cry from $115.  Even now oil can turn sideways suggesting yet another leg down.  The gold/oil ratio  was just a bit above 32:1 so I consider that still very cheap oil.  Distilleries, will switch processing and even take downtime this time of the year, all of it can add to the production and movement of oil around the world.  The bearish mood is at an extreme as the news constantly reflects the bearish side. 

If this bull market has more to go than it should hit the top of my trend line one more time, or several more times. 

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Crude Oil Intraday Bearish Decline Review: Will Pokemon Go Stop Oils Decline?

 

The Pokemon Maina is insane since it started in Canada.  One analyst looked at the energy consumption needed to fuel this game.  How Much Energy Does It Take To Fuel The Pokemon Go Craze?

Even running shoe makers will benefit as people walk around, wearing out their runners hunting for these little critters. What will they think of next? My personal experience is that I used it for 3-4 days, but deleted it from my iPhone very quickly. Why?

In my personal opinion I found that the Pokemon game invades our privacy too much!

CLU16-July-28-2016

 

 In the real world we have to deal with charts where the Pokemon Go repersents numbers and letters. 😀  We have the same problems in counting down at a smaller scale than we have on a bigger scale, so we can say that the EWP is scalable to any size. (Degree)  If I see a potential diagonal down the whole side of a “C” wave, then I allow the exact same thing in any degree level.

The simplest way to explain this is that I take that ending diagonal from the book and  stretch it, so it looks like a big 5th wave extension.   If this can happen in a fifth wave, then I allow any 5 wave diagonal in a 5th wave in all degree levels. Locating a diagonal decline helps as a location identifier, which is far more important.  

I adjusted this decline adding a potential triangle pattern into it. I don’t show the diagonal count all the time, but they are present, as the zigzags link together.  On the weekly charts we are getting a nice long spike so either a reversal should happen, or a big counter rally is due.

As oil stays subdued and gold soars, this makes oil become cheaper when we use gold as money. Today the gold/oil ratio hit just under 32:1 so this cannot continue if we are in a bullish correction.   

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Crude Oil Bust Review

 

CLQ16-June-24-2016

 

This Brexit vote has all the world in a shock, as they say even the bookies didn’t get it right! This will soon be in the past, as the wave counts never stop coming. Oil crashed as I though it would, but it has now stopped with a very good looking “ABC” correction. If oil has seen a bottom and we do get a rally, then this could still be a “C” wave bullish phase. There is always another crash after an inverted move. This would be part of a potential triangle, and we would have to watch for any impulse waves not acting to the impulse script.

Overall crude oil became cheaper, as the gold/oil ratio hit 27:1 again.  This oil drop brought out all the oil bears so when the bears dominate, they can also be in a bear trap. Nothing suggests that this crude oil bull market is over and done with, but we are under a diagonal type bull market.  Diagonals are much harder to pick tops and bottoms with, but keeping an eye on the “ABCs” helps to pick lows. 

Can this oil pop up as an inverted wave 2? Sure, it can as there are always 5 choices at any turning point. I constantly try to eliminate patterns, and what is left can be a much better wave count.

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Crude Oil Intraday Review

 

CLQ16-June-23-2016

 

Crude oil was hit with a crash, which I thought would make a good wave 2 bottom yesterday.  It was the next rally that just started yesterday, which has already  broken the impulse wave structure. It remains to be seen if another newer low is going to happen, and if that low will then produce another leg up. 

If a correction still needs to finish and it travels much deeper, then I would suspect that another potential inverted zigzag is on the way, which would then turn into another “C” wave bull market.   An inverted zigzag would also suggest that oil may be in a bigger degree 4th wave triangle, in which I would have to push my degree level up one more degree.

Any big bullish phase in crude oil is not over yet, as even now the cash, gold/oil ratio,  is only around 25.7:1 This still makes oil amazingly cheap, when we use gold for money.

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Another Look At Crude Oil.

 

CLQ16-June-18-2016

 

I have moved into the August oil contract. Between months we can get all sorts of different prices, but in this case oil touched below $32 while others are at about $28. It is all about the pattern and since the January oil bottom crude oil has charged up.  The charge up is a very choppy like pattern with key waves overlapping so much, that I am forced to think it  as a potential diagonal bull market.  I did not label it as such, but the general impulse pattern is still there. 

I just don’t see oil being close enough to any potential “A” wave in Minor degree, but we could have finished an expanded flat like pattern, with the 4th wave ending last week. Before I had used the Minute degree wave three, but this would drop it down by one degree.  It will also give us more upside before any potential “A” wave.

I would love to see oil head higher, and we should see some decent subdivisions, if this ends up becoming true. The fact that this 2016 bullish phase sure looks like a starting diagonal type, is a clue that crude oil will one day crash back below these low 2016 levels.  It may still take many years for oil to make the complete circle, but if I talk about it too much then, readers can get the idea that it’s happening now.  There are many other patterns since 1980, that also point to another major oil bear market and glut, in the future.  I say this because the patterns have huge forecasting qualities in them.   Sure oil can go back up to over $115 but we have to be on the look out for a much shorter fake bullish phase just in case.  

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