Tag Archives: WTI

Crude Oil Intraday Bearish Review

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

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

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

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

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Crude Oil Intraday Crash Update

 

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

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

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

 

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Crude Oil Intraday Bullish move Update.

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

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

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

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

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

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

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

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Crude Oil Intraday Rocket Ride Update!

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

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

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

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

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

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Crude Oil Rocket Rally Update

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

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

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

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

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

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

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Crude Oil Intraday Update: Resuming Its Trend

So far the crude oil down trend has had a good start, but it is still a bit early to tell. I might have to drop my degree level down by one degree in the future, but right now I can keep the same wave count that I started with. If the bigger bearish phase is real then the small double to you see could be the record high for oil in 2018.

On this June contract $66.20 seems to be the record to beat.

In order to confirm a potential Intermediate degree 4th wave top we need 5 waves down in Minor degree or even a single zigzag type move also in Minor degree.

What we just finished looks like a 4th wave top because immediately after, diagonal patterns started to emerge. Diagonals have a nasty habit of showing up in 5th wave declines, so instantly diagonal wave counting has to be used.  Any wild spike early next week could still take out the top trend line, but we should always expect wild counter rallies after a steep decline.

The Gold/Oil ratio is now 21.36:1 and this ratio should keep on expanding as crude oil declines.  I would also like to see all the COT reports in oil start to show that the commercials are becoming net long. At this time we are a far cry away from that happening.

This year it looks like the June and December months are the two busiest months, which is great. The December contract is running about $2 US dollars lower, so this does not support the oil bull market to keep going.

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Quick Crude Oil Intraday Update

As I post crude oil is still heading higher but I think it will run out of steam again if the bigger bearish picture is real.  The Gold/Oil ratio is above 21:1 already and we should see this ratio expanded if this bearish phase keeps going.  Sure, it’s nice to start counting a 5 wave sequence heading down, but we will still get very violent counter rallies.  It still may take some time for the patterns to smooth out a bit, but I think the bigger trend is down. The December 2018 crude oil contract is about $2.47 US lower per barrel than this June 2018 contract,  which is kicking the stuffing out of the bull market.

Even most of the commercial traders are against the continuation of the oil bull market. With the present day gold price and a potential 30:1 Gold/Oil ratio, it could bring oil down to the $44 price level. That is a purely speculative oil price as the $40 price level can work as natural support, even if it may only be on a short term basis.

The big impressive wedge in oil prices I have talked about and drawn out, gives us a heads up already that a huge bullish phase can explode once the wedge sees bottom trend line contact.

The wave 4 top in Intermediate degree is telling readers that my oil wave count has already passed a Cycle degree peak back in early 2008. Since that top crude oil has been in a bear market that hasn’t finished and might end up lasting 13 years before another major reversal in oil will happen.

The trade war seems to be picking up again so fear will always be dominate in the oil market.

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Crude Oil Intraday Gyrations Review

Last week, crude oil created a double top with the secondary peak being a bit lower. I show a starting 1-2, 1-2 count and a third 1-2 wave count might become visible due to the fact they are very small waves.  I show a “C” wave bullish move which I counted as a diagonal “C” wave. The Gold/Oil ratio has not changed that much, but this ratio at about 21:1 is running into a brick wall as it has been stuck around this ratio for some time.

There is a very good chance that crude oil will dip along with stocks, and when that becomes more obvious, then the Gold/Oil ratio should expand or get cheaper.

Commercials are net short WTI crude oil, but they are also net short the Europe Oil ICE futures. The speculators are in the exact opposite positions as they are the trend chasers and always get themselves in a trap. In this case speculators are caught in a bull trap. Until some of these numbers change I can’t see any extreme bullish oil scenario at this time.

The commercial traders deal much closer to the oil industry than any speculators do, so they carry a lot less risk than the speculators. Commercial traders are not going to store high price oil, because they make no money, but when the oil price crashes it is very profitable to store oil. They will pull out all the stops to make this happen when the price of oil crashes again. In one world oil glut, (2008) they had 25 tankers floating around the Mideast gulf region at that time. Low and behold all those tankers eventually disappeared. The same thing happened at the 2016 low, as they were stacking up oil carriers to deliver oil to China.

Not until I see that a huge corrective pattern has taken place can I turn bullish on WTI oil again.

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Crude Oil: Break Out, Or Bear Attack?

Once I had a look at the intraday chart I had to bump it up to 3500 bars from my normal 500.  This allows us to go back further, but still keep Intraday settings.  At the $65.36 price level crude oil could be hitting a brick wall, at least in the shorter term. We have a double top and a big obvious Head. In true bull markets, these types of H&S setups can be very bullish,  But if we are ending a bullish phase, then this H&S pattern can be an ominous warning.

It sure looks like a bullish zigzag but I do have choices depending what oil will do next, if it crashes with another zigzag, then a triangle will work, but if any decline looks more like a 5 wave sequence, then an expanded flat could be completed.

We could roll around the $56 price level for a little while, before oil turns and soars again. I think if another zigzag develops heading down, then we should get a big “b” wave counter rally.  I will give crude oil until the $55 price range, but after that the wave counts could get trashed rather quickly.

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Crude Oil 2009-2018 Weekly Chart Review

What the majority that called that crude oil was in a bull market didn’t pan out that well. The crash into the 2016 bottom made sure of that. Even now, many call this a bull market, but they are also waiting for a correction. With crude oil we have monthly contracts, but I always look ahead to see where the next busiest month is.

Without a shadow of doubt,  the June 2018 and December 2018 contracts are the two busiest months. This means when the June contract expires I will be going directly into the December 2018 contract month. There was a 25 cent difference between the April and June contracts which is nothing in the bigger scope of things which produced  little change in the Gold/Oil ratio. I will talk more about the Gold/Oil ratio at the bottom of this page.

The fact that I’m showing a Primary degree “B” wave top must make the July, 2008 peak a Cycle degree peak. At the early 2009 bottom, we have a bear market about 7-8  year’s long, plus another two years in our present rally. It would be something if crude oil ended up with a bear market lasting 13 years!  I don’t think we can get that lucky because the big question is if our present rally is a fake.

This could still take a few more years and we need something more solid to go on. During the 3 year, topping process oil created a classic wedge which gave us a clue that a down draft in the price of oil was coming. Flip this wedge in reverse and you would get an explosive rally, like what happened with the VIX.

 Analyzing Chart Patterns: The Wedge

The H&S pattern didn’t disappear or is no longer important, even with a higher right shoulder. The January 2018 peak finished at $65.52, but there is no guarantee it will hold in the short term.

Crude oil crashed along with stocks in 2008, but also recovered with the stock market in early 2009. What has happened once can happen again, so I sure don’t want to rule anything out.

Any 4th wave bullish phase should technically get completely retraced, which would be lower than $28 on a weekly crude oil chart.

America has become a giant oil exporting nation so they can pump as much as other countries are willing to buy. The supply may not be an issue, but demand could dry up and blow away. This is speculation based on a possible 4th wave scenario in Intermediate degree.

Why U.S. Oil Exports Are Surging | OilPrice.com

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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 Rally Is There More To Come?

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

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

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

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

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Crude Oil 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 Impending Bearish Phase.

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

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

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

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

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Crude Oil Intraday Record High Running Out Of Gas?

Crude Oil seems to be running out of gas and has started another move that could fall much lower or deeper than what the majority think will happen. When I think it is important, I will post multiple wave counts.Since I dropped the degree level down by one degree, but used the bottom of Minscule degree.  I will no longer post any wave count that is smaller than the official list of 15 degrees. By using only 15 degree levels, it helps to better gauge the end of a run across most intraday charts.

Simply put, “once we run out of degree levels, the bigger trend is also coming to an end. The size of the 4th waves get smaller and smaller, as we get near the end of a run. I have gone back to using the fixed degree list for some time already, which most readers will never notice the change.

Yes, I may still be a bit early, but we have to be a bit early so more readers can adjust their thinking.  If we go back to the daily chart, we can see a major bottom on June, 22, 2017 of $44. This would be a very bearish downside price target, which is hard to imagine, but I would consider a decline like that as pretty normal.

We are dealing with wildly leveraged commodities contracts, that have a very bad reputation for making crazy moves that are very hard to catch before they happen.

It will remain to be seen if we have more upside left, but I sure like the idea of a triangle in a 4th wave which was followed by a “thrust” to the upside. The triangle forces a degree change as well, and most of the time it can be a difference of two or more degree levels.

At $60,  oil has run into resistance and struggled as it touched $64 so far. There is also a huge H&S pattern with the daily charts, and we know these patterns can also produce violent reactions.

The Oil volatility index OVX also had a bottom at $22.98 and has now started to climb again in recent days. Technically speaking the OVX will rise much more if this bearish oil correction starts to take shape.

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Crude OIl Daily Chart Vertical Move Update!

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

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

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

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

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Crude Oil Daily Chart Bull Market Update

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

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

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

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

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

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Crude Oil Intraday $60 Resistance Update.

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

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

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

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

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

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Crude Oil Intraday Rally Update

Crude oil did not decline any further, but actually stop right at the Fibonacci $55 price level and has now proceeded north again. Back in late August 2017, crude oil stopped at the $47 price level, which is also a Fibonacci ratio, (34×1.382). There is so much turmoil in the world crude oil market, which can screw up any fundamental reason for oil to rise.  One minute they call for a return of the crude oil bear market, and next they call for $60 oil.  I would rather see oil above $89 some time in the future, but the Gold/Oil ratio would have to help confirm it. 

Today the Gold/Oil ratio dropped below 23:1 which only happened a few times in early 2017.   Oil is getting a bit more expensive when compared to gold, but still well below any long term overbought condition. If the speed of the ratio compression picks up, then we may be getting closer to a much bigger correction. The last thing I want to do is call an end to this bull market, before it’s ready to do so. Oil may still have to make a much bigger vertical move, before any end is near, 

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Crude Oil Intraday Crash Update

In the last few days crude oil has finally started to correct as oil plunges this morning. So far we have a spike to the downside, but that can just be the start of a diagonal decline. Oil may have to get close to the bottom trend line before it is ready to crank up again. I’m sure the bearish news will come out again, depending on how long this correction might take.

Without a doubt this oil market is about as choppy as it can get, which indicates a diagonal bull market is in progress. Oil may not reach the bottom trend line, but if a good correction plays out, then crude oil will resume its march northeast again.

The Gold/Oil ratio is about 23:1 which is not near any extreme ratio, so in the longer term there should be more upside to come. 

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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 Bull Market Review

As choppy as these chart patterns show, it looks like the bullish phase still wants to move higher. Another zigzag looks like it has formed, so crude oil should break out to a new higher high.  Since the late 2015 bottom (daily chart), oil has been on one wild ride where most critical waves have overlapped. All these overlapping waves surely points to a potential zig zag bull market that should still take crude oil well above the $58 on the daily charts.

Since the June 2017 bottom crude oil is far more choppy that many other wave structures, so after oil breaks to a new high, it could implode again with a complete retracement of this June 2017 low of about $43. That would be the worst scenario in the short term.

The Gold/oil ratio has not really changed that much and is still sitting around the 24.32:1 ratio. I want this ratio to change in a big way by compressing this ratio towards the 20:1 ratio.  This will still take a long time before this happens and taking 2-3 calculations every few weeks, should give us an early warning, when oil starts getting expensive in real money terms. Gold is the real money, as all so called paper money is just an illusion. Paper money is just an electronic entry with only about 4% being real cash money that we can see and touch.

The crude oil chart started in 1860 and I’m working it is a big 5th wave extension for now. The 2008 top can work as a Cycle degree wave 3 position, but with a potential triangle still to play out.

Short term oil has to work through some price hurdles, that all need to get retraced until we see the last peaks in the rear view mirrors.

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Crude Oil Intraday Review

For the last few months, the oil rally has been about as choppy as anyone can have. This makes trend picking much more difficult as any downside move can seem like the onslaught of an oil bear market. Yes, some have been calling for a bear market heading back down to $10.

Half A Million Bpd At Risk From Geopolitical Firestorm | OilPrice.com

There is the potential for a civil war to break out in Kurdistan, which has landlocked oil fields which must be pumped out through Turkey. Any stoppage of oil flow from this area could severely restrict the buildup of oil inventories.  

Oh the horror of it all, if they start yapping about an impending world oil shortage!  Some even say that the era of gasoline cars is disappearing fast, but the world runs on about 80% fossil fuels just to generate electricity.  The electric grid can be very unstable due to solar storms, so as we use more and more electricity, solar flares can and do have a huge impact on the earth. 

The worst would be that oil crashes much lower from the highs of today, or if oil keeps struggling  just trying to break out to higher highs. 

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Crude Oil Intraday Update

Crude Oil did dip a little lower than the $49.80 I had shown. There was about a 30 cent difference before oil blasted up again. Due to the choppy nature of these oil charts, it is next to impossible to sequence a good looking impulse set of wave together, except on a very small degree basis.  The present oil rally could also be a fake, but with a deep correction crude oil could charge up again, and break another bullish record high. 

The $53 price level seems to be the short term peak to retrace, but the $58 price level must eventually be retraced to help confirm that the entire 2017 bear market has been or still is just a correction. 

Even if we are in a big “D” wave bull market, the majority can’t tell the difference between a big bear market rally and a bull market. They both go up and participants jump onto both types. They only care about one thing and that is that it keeps going up. 

Bear riders did the same thing on the way down, which just about always produces a bear trap sooner or later.  The Gold/Oil ratio helps in keeping an objective perspective on how expensive oil is when we use gold as money.

In late 2015 this Gold/Oil ratio touched an insane 44:1 ratio, which is the widest ratio I have ever recorded. Today we are sitting at a bit over 25:1 which has been the low average this year. Tracking the Gold/oil ratio several times a week gives us a heads up when oil becomes expensive when compared to gold. If the ratio jumps to 20:1 or lower, then we have to pay attention.  Crude oil could one day sit at $89 with  the world experts calling for $100 oil, but if the Gold/Oil ratio is sitting at 15:1 or less, then be prepared for the price of oil to crash one more time.

Of course, another real world oil glut would also show up again. Until that happens the oil bull market is alive and well, no matter how choppy and wild the bull market still becomes. 

This makes wave counting oil a real challenge, due to the leverage which is part of the commodities landscape. I would love to see this rally hold and push higher, but only time can answer that question. 

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Crude Oil Intraday Peak Review

Crude oil has been cranking up in price, but the pattern gives us nothing but choppy waves. There still could be one more shot to the upside, but eventually we should get at least a correction, to throw off the bull wagon riders. There are a few near vertical moves that defy logic, but we also know that markets don’t work on logic. Markets run on emotions, and anything related to commodities usually runs on “fear”. Fear and extreme leverage produce all these wild spikes. 

I thought I would add a picture of what I can see any time during any hurricane season, which all should become less frequent until the end of hurricane season in November.  Even though massive amounts of warnings were given the majority were surprised when the hurricanes shredded the Caribbean islands. 

The Gold/Oil ratio, compressed a bit more making oil a bit more expensive gold. The last time we had a 24.83:1 ratio was way back in April 2017. Still, this is not near any extreme just yet. I record ratios several times a week, and we would have a concern if this ratio suddenly shifts and compresses much more. 

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Crude Oil Rocket Ride Review

The correct I thought would happen was trashed as crude oil soared to another higher high. Crude oil also created a vertical spike which is usually followed by a correction in a bull market. When the big bullish phase comes to an end, then we could also see a vertical move, but then it sure will not be a correction.

That time is not now even if we have a dramatic decline in oil prices. Oil may wobble around for some time but should then start to crank up again. 

With this spike the Gold/Oil ratio became more expensive, but not by much. At 26:1 crude oil has lots of room to move up, but if we see a sudden shift towards the 20:1 ratio then we have to start taking notice. Until that day comes, this oil bull market is still alive. If we measure once or twice a week we should start catching any extreme long before the majority get suspicious. 

If we don’t calculate the Gold/Oil on a regular basis, then we will surely not see another oil crash coming. Besides the Gold/Oil ratio,  Steven Jon Kaplan will also see the top coming. He will post it or send that information to his subscribers, like he did in 2008. I have his RRS feed on the sidebar, but we have to see if it works the next time he posts.  

I do not use any internal indicators as those are the indicators for the majority, besides all those indicators in the trading tool box, are from an ancient era of the 1970’s when electronic trading started. 

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Crude Oil Intraday Correction Review

Since early August crude oil has been on what looks like a correction. Where we are in this correction is another matter. The correction could have finished in late August, but that remains to be seen. Even now oil remains choppy with no real direction in mind.   Worst case scenario is that oil is in a triangle, but them we surely cannot be in a wave 2 positions. $58 is the big price top to beat, which would confirm that the entire bearish phase since mid 2016 was just a correction. 

Only one hurricane shows up at the Hurricane center web site, with Jose being far away from landfall and only rated as a category 1 at this time.  Another hurricane may form, but that can  still be 48 hours or more before we can see anything.  Hurricane Harvey wrecked havoc where 20% of oil refining is shut down. In the long run it will all work out, but these hurricanes are just part of the turmoil that is facing oil production and refining around the world.

September the 10th is the midway point of hurricane season lasting until November 30th. It seems that the types of storms also change in the second half of hurricane season.

The Gold/Oil ratio is just a bit below 27:1 which is still relatively cheap when comparing it to gold. This ratio has been drifting between 25 and 28:1 and until this ratio shifts dramatically towards 17:1 or lower, then the oil bull market is still alive. Oil could go to $89, and  if this ratio turns into a 17:1 reading or lower,  then we know to look for the end of the oil bull market. 

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Crude Oil Intraday Crash Update

At this time crude oil did travel a few dollars higher than expected, but has now started to correct. Back in August we had a single zigzag,  but this was the opening move to a flat, an expanded flat at that. If this is all close, then we should see a much deeper decline coming in the next few weeks. After all holiday driving season is coming to an end and oil could be flowing again with plenty of inventory from reserves.

Even if crude oil declines to a new low, it can convert from an “E” wave decline to a regular zigzag wave 2 type of a decline. We will not really know until the “B” wave bottom is completely retraced. Even the initial move down was pretty steep, which gives us a clue that a correction is going to take place.

Even with all the wild moves in gold and oil, the Gold/Oil ratio got a bit cheaper and touched 27.47:1. This is far from being expensive when we use gold as money,  and eventually oil will start to crank up again. If the ratio changed suddenly to say 20:1, or lower,  then we may see some real bearish action again. For now we are still far away from that scenario.

Gasoline and crude oil can go their separate ways for long periods of time, as gas has to go through the refining process first. About 20% of the refineries were shut down due to hurricane Harvey,  so that still leaves lots of refineries that can get back to full operations pretty quick once conditions allow.

So was the early September rally all “Harvey”driven?  Before too long we will never know exactly which wave it was, because people simply forget. Back in early 2002 a major hurricane hit land when oil was at a wave 1 in Primary degree. I remember the wave count, but I would have to look up the hurricane which hit the oil rigs at that time.

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September, 2, 2017 Crude Oil Daily Chart Review

There is lots of turmoil surrounding crude oil and potential gasoline shortages these days during hurricane season. Gasoline has charged up, but crude oil has remained well below gasoline futures.  I looked over the weekly chart and labeled  the 2008 peak as a Cycle degree wave 3. Don’t count on that as being glued to its position, just yet as we have to wait until this entire anticipated bullish phase is a done deal. Crude oil shot up in the last days of August, and if this zigzag that I’m working is true, then we should still move a bit over $48. At $50 I will start to scream “Uncle” as at the $51 price level, this wave count will get trashed.

Another 5 wave decline would have to follow with $43-$42 being the best target price. From the early 2016 low crude oil moved in such a choppy fashion that many of the wave positions I used, did not last long. I think there is a huge expanded “B” wave, with a diagonal decline. They are not impulse waves as every single rally wave, overlapped at critical positions. Expanded patterns in “B” waves or 4th waves can make dramatic reversals and push oil to new record highs.  Any “c” wave decline can drop like a rock in a very fast move down, like a mini flash crash. Those flash crashes or algorithms wrecking havoc, can produce those long down spikes that we can see. 

We are heading into the fall, but hopefully we will see this bottom by the end of this month. I feel pretty confident that the bigger bullish phase is nowhere near a done deal as the Gold/Oil ratio is still lethargic at this time. At 27.28:1 crude oil got a bit cheaper when compared to gold, which is a good thing. 

At the 2008 peak this ratio was about 9:1, and with the 2016 low it registered 44:1. This was a massive shift by any stretch of the imagination. In 2014 this ratio was about 17:1 before crude oil start to crash again. I think we could end up going well below 17-20:1 again. If this Gold/Oil ratio becomes compressed to the point that at $89 it becomes silly again, then oil will be setting up for another crash. The mainstream media could be hyping $100-$200 oil again by that time, but we know that markets will head the exact opposite way, when those days arrive. 

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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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