Crude Oil 1999-2019 Review

I constantly review the bigger picture, as I see it everything related to commodities are diagonal wave structures. The 1990s was a correction with a triangle in the “B” wave of Intermediate degree ending in 1999.

Then in the middle of a worldwide oil glut crude oil started to soar until peak oil ended in 2008. Most of all wave analysts count 1999-2008 as a set of 5 waves in Primary degree, yet I count 7 waves.  Forcing 5 waves when there are only 7 waves is what I try and avoid.

During the 2008 peak, the Gold/Oil Ratio hit 9:1 when crude oil started to crash. Many smart contrarians knew that oil was going to crash, just because of the ratio was at an extreme.

I called the crash as well except my wave degree levels were off by a long shot.  From 2008 to the 2016 bottom looks like a perfect Primary degree zigzag has completed, which also ended with a potential 4th wave in Cycle degree.

Another zigzag in Primary degree could be one of the options that will end with Cycle degree wave 5. Wave 1 in Intermediate degree may already be completed but in the short term, oil can be fooling us as wave 2 might not be finished just yet.

The drone attack produced a crazy move to $63, a few dollars shy of what I thought it would do, but in its wake oil also produced one “Humungous gap”.

It was about a $4 gap between $56 and $60, so crude oil can crash right back down to $56 with little problem. (or lower)

I have never noticed a gap in oil this large since I started wave counting oil. This is a very bearish signal.

There should be no panic as they say the drone attacks was just 5% of world oil production taken offline. This made the USA the largest exporter of oil for the short term.

The Gold/Oil ratio also compressed to 24.9 from Fridays ratio of 27.13. Oil refineries blow up regularly but they can also rebuild them very fast by working 24/7.

Only time can answer a few more questions, as we have to see how deep oil prices can still fall.  Any oil price fall below $45 will definitely kill this short term wave count.

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Crude Oil Drone Attack Review

It seems pretty popular that events and news releases happen on the weekend when the markets are closed. The recent drone attack in Saudia Arabia is a prime example.

The markets are closed so the oil prices will not react until the start of trading Sunday night. It still gives traders lots of time to think it over if panic is going to hit the oil market.

There is no shortage of oil in the world as every country wants to pump and sell as much as the can. In the USA refineries blow up on a regular basis, but production gets back online fairly quickly.

Oil could make a drive to $60 before another decline sends oil south, but again early next week should tell us more.

Oil is in a crazy complex correction that is far from being finished and if oil ever falls below the December 2018 low of $45 I must use my bullish wave count.

Oil is still in a death cross but that also can change next week if oil makes a bounce.

The Gold/Oil ratio is far away from being expensive (9.1) as today it sits at 27.13, which is barely a point difference than 10 days ago. The ratio is not an issue at this time.

The commercials are net short but those readings are not at extremes as well. There is lots of room for oil to move in both directions.

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Crude Oil Another Potential Top!

I stretched this intraday chart so we can see back to the last major peak. It’s pretty hard to accept that a bullish run like this can be just a bear market rally, but for diagonal waves, this is still pretty normal.

This oil 4th wave I may have just barely kissed my wave 1 in Minor degree, which is also very normal for diagonal waves.

At $61 oil has started a small correction and the depth of any impending oil decline could trash the $56 price level.

Just as fast as oil has roared up it can die screaming from a bear attack.  Futures are always leveraged and have no daily trading limits, which produce very violent moves.

The oil units in a Forex account are just as violent which I try to trade in when I can. Four oil units take a little less than $20 to own and there are no contracts to contend with.

When I see a near vertical move like oil has just made, then either we get a strong correction or oil plunges with no support!

I will never post long drawn out fundamentals as thousands of others are doing just that already.  A few years from now nobody will remember or know why oil  has crashed.

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Crude Oil Intraday Rally Review

This is the September contract and I made some small adjustments to what is a diagonal wave pattern.  With the world being fundamentally bullish and oil is pointing up, then showing you a potentially bearish scenario is hard to understand.

I expected the June rally and it started to hit resistance at $60. Even with trade wars, oil tanker attacks, tanker confiscation and a host of other fundamental reasons, crude oil can still crash.  Just because shortages can spike the oil price at any time, does not mean a whole new bull market has started.

Every time there was a war in the Mideast during the 1990s, oil would spike from a $10 low to $40 and then back down to $10.

That was a 19-year bear market with a triangle in its “B” wave of Intermediate degree. Oil is presently in an 11-year bear market and it had a huge bullish phase until 2014-2015 after which it crashed to $28.

The Gold/Ratio is sitting at 24.2 which is a bit cheaper but it seems to be stuck on repeat as this ratio hasn’t moved much.

All commodities travel as diagonals and they have been doing this since the Little Ice Age. The 1890s DJIA pattern is so choppy it took me years to understand. This all change with the Roaring 20s as other investments took over.

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Crude Oil Intraday Mini Crash Review

Late Friday crude oil took a sudden dip which I was expecting but didn’t know exactly when. So far June has been a good month for oil, but a correction seems to be underway.

I would like to see oil drop a few more dollars which could take until after the July holiday celebrations are done with.

Summer driving is around the corner and ICE vehicles will get you where you are going much faster than electric cars will.

Of course, if your battery pack doesn’t blow up first!  EV’s are supposed to replace “ICE” cars or “internal combustion engines” transportation, then why do they need to subsidize electric cars?

I call them “corrections” if I feel that another leg up can happen. Any 5th wave can extend dramatically and once it’s finished, I’m sure a spike will develop on the daily and weekly charts.

A price drop to $57 is what I would like to see, then the $66 price level would be my final price target. So far the waves are good looking impulse waves and they alternated from the choppy “A” wave very well.

Fossil fuels deliver and harvest 80% of all our food so without crude oil it wouldn’t take long before millions would starve to death.

 

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Crude Oil Intraday Bullish Review

Crude oil has now traveled further than what I would like to see for a bear rally so I have to explore the bullish alternative.

I’m starting wave 1-2 in  Minute degree and the waves do look a bit short at this time. We also know that when it comes to extensions the 5th wave can perform miracles in any commodity.

A very important high would be at the $66 price level which would also produce another double top.

The Gold/Oil ratio is 24.3 which has not changed all that much.

I will keep this short for now as I have to review the daily chart as well.

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Crude Oil Intraday Correction?

During the night crude oil started a reversal and the only question is, is it a simple bull market correction or will the entire move in June be retraced?   Only time will tell but the rally does look like a zigzag so I will remain bearish but be vigilante if a bear trap is shaping up.  Gold is still in a rally but oil crashing makes oil become cheaper or cause gold to crash, as any Gold/Oil ratio will adjust itself.

On the daily charts, the 200-day MA has just produced a very small death cross so oil would have to do some fancy footwork to avoid a full-blown death cross.

There are no daily limits in all of the futures contracts I follow which means violent swings can always happen, and if your short oil then you may see some “green” in your oil short positions.

I have a small Forex account where I trade 5-10 oil units depending on how much confidence I have to the downside.

The Gold/Oil ratio is about 24:1 and sooner or later this ratio has to shift making oil cheaper if oil keeps crashing in price.  Sooner or later the Gold/Oil ratio will bring the gold price down as well.

If gold blasts up to say $1511,  in a fit of panic, then the Gold/Oil ratio could hit a 62:1 ratio.  Gold can move $100-$200 easily but I have never seen or recorded any ratio spread that a 62:1 ratio would bring.

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Crude Oil Intraday Rally Update

As much as I would love to remain bullish with oil, a very sharp spike is also taking place. Oil got to $57.40 this morning and there may be a little more upside still to play out.

I’m sure the rest of the planet of oil speculators wouldn’t dare short oil at this point, because they work on fundamentals which is news. News about some tanker/drone attack and the price of oil goes berserk. Does that mean that oil is in a new bull market? I doubt it, as all this has happened before back in the 1990s.

In those days they had multiple wars driving the price of oil, but in the long run oil still crashed to $10 by 1999. I love to short or sell when I have a vertical move, as they can usher in a big correction or the end of a bullish phase. If oil still charges to $60 then this would be smack dab inside my previous 2nd wave of one lesser degree.

The Gold/Ratio has changed little as it still around 24! I will be rounding down or up my Gold/Ratios. Every time I post a ratio I also enter it in a small log book and in June I went overboard as I recorded 8 Gold/Oil ratios already.

I will give the oil postings a rest unless some unexpected dramatic news comes out.

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Crude Oil Another Intraday Look

As much as I would love to be bullish on oil especially when a potential golden cross is going to kick in. The June 13 bottom has now created an inverse zigzag which is a small bear market rally.

During all of June, we had a sideways market that sure looks like a triangle. Triangles happen in “4th” waves and “B” waves.

Just as fast as this golden crossing kissed it can also turn right back into a death cross!  Everybody is waiting for “Fundamental News” that might send crude oil soaring. Traders or investors can get very emotional during any news release which can send the markets down just as easily.

I trade the WTI Forex units and tried short positions several times this year so I cry a lot if I miss another shorting opportunity. I’m not just after any move as I look for any potential 5 wave sequences I can ride up or down.

If a potential move has a 50/50 chance then I only take small positions or be prepared to bail out fast.

The Gold/Oil ratio is around 24:1 which I would like to see expand some more.  I may have to wait until the weekend before I post another oil wave count.

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Crude Oil Intraday Tanker Attack!

In the last 6-7 days, crude oil has created a double bottom followed by price surge due to some tanker attacks bound for Asia. Events like this happen but rarely do they spawn a complete bull market.

Crude oil can keep going but it should reach the top trend line before I turn bearish again.  I use oil futures to help set-up a Forex oil unit position. I like to make short bets as taking a strong long position can get us into a trap.  If a single oil short shows “Red” in my account then I get out and wait for a better bearish set-up.

Oil is in a bigger bearish phase than what we think but oil traders jump on a bullish move chasing the price.

Right now oil may be bullish for all of June as there is the potential of a 4th wave counter rally still to complete.

 

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Crude Oil Intraday Update And Impending Golden Cross!

With this December intraday chart, we can see that crude oil already had a death cross at the $61 price level. Crossings happen more frequently at this intraday level and another crude oil bullish phase would be a set-up for a golden cross.

There is room for oil to rally again, right to the top trend line at the $56.50 price level.  Another leg up sure could force a golden cross in oil to happen.  The problem with moving averages is that they are useless after they happen.

Any summer rally at this point sure could produce a golden cross but then another new set-up for another death cross can also happen.

I use crude oil futures as a set-up for trading Forex oil units so this morning I closed off any short positions I had in Brent and WTI oil. I sure can be wrong so I only take very small bullish positions where it is easy to bail out just in case no rally takes place at all.

Any price spike with a vertical move would force me to close any short term bullish positions, but if the bullish phase comes true then I would be building a new short position.

Another bullish move could take all of June to play out and surprise moves should be expected.

The Gold/Oil ratio has improved with a reading of 25.40:1 this morning and I want that spread to keep getting wider.

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Crude Oil Intraday Crash Update

Crude oil gave us a short bullish move before oil reversed and plunged to a new bearish low.  Oil has completed 2 sets of zigzags and we need two more and maybe a third, which could turn into a flat.

Another $5-$6 drops would be nice and then oil would be ready for a wave 3-4 rally in Minor degree.  These diagonal waves can make spectacular moves when there are no daily trading limits.

I would love to see another small 5 waves down in Minuette degree before another potential counter rally can kill the bears and send them running back into the forest!

They’ll be back and that should coincide with my 5th wave down in Minor degree.

The Gold/Oil ratio definitely got better but at 22.8:1, it’s still not enough to jump up and down about.  I do have some WTI short positions and so far the trade is in the green.

All this can fall apart if the “B” wave in Intermediate degree is too far off base. It may take until November/December before this, “Run of Five” gets completed.

When the “B” wave disappears on this 90 min chart then the wave 2 in Minor degree will be the main position I’ll be counting from.

The problem is that any “E” wave bottom in Primary degree could be below the $26 price level which is about $30 away from today’s price low. For that to come true some serious extensions would have to help it otherwise oil could come to a grinding halt much earlier.

During this 90 min chart, we had a golden cross and then right back into a death cross. With the daily chart, it will not take long for the 50-day MA to slice through the 200-day MA.

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Crude Oil Crash Intraday Update

This is the December 2019 contract.  During May the counter rally had many analysts forecasting the return of the bull but instead the oil bears came out out and decided to shred oil bulls which produced about a $6 price crash.

Since the April top I believe a diagonal decline is a high possability and started the count to help confirm it.

I have 2 zigzags in a row so that rules out any flat at this time, but it also means crude oil can come back and dip well into the previous wave 2 of the same degree. This would be close to the $62 price level and must not exceed above May 2019 highs. ($63.25)

The big test is yet to come so we have to see if any rally continues to be choppy or even go sideways for the rest of the month.

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Intraday Crude Oil Rally Update

This crude oil rally in the month of May looks like an inverted zigzag and can work as a bear market rally. Diagonal waves do make wild moves and can confuse us by breaking out to a new record high.

In a true blue bear market rally, this chart cannot push to a new high past that April peak of $64.89, otherwise we have to assume that the bull market had not completed in April.

In the next week or two oil should give us a better picture, but I sure would like to see oil breakout of this short term sideways market.

The Gold/Oil ratio hasn’t changed that much as at 20.30:1 the Gold/Oil ratio number is still hitting a brick wall which started in the first part of April 2019.

I will not repeat or entertain the reams of fundamental data being continuously spewed out, as it’s impossible for me to compete.

Fear of war can drive prices, but fear moves are highly overrated as they rarely last very long. Fear of war also happened in the first Gulf war so our present situation is not that much different.

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Quick Crude Oil Intraday Update

Late last month oil soared to a new record high after which crude oil started to decline and turn bearish.  Sure we can just work another correction but to be blunt it’s still far too early to tell.  Comparing this June contract top to the December intraday top, we have a different wave count. What else is new as that happens often enough!

This June contract will disappear but for now, we have more than a month before this contract expires.

For now, I will work oil as a potential 5 wave sequence until It gets destroyed or no longer works. I trade oil with the Forex oil units and they make these futures contracts look pretty docile. I’m expecting a much bigger dip as this bearish phase could be just getting warmed up!

Oil hasen’t moved enough to make any big Gold/Oil ratio changes but the COT report tonight may give us a bit more insight.

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Crude Oil Weekly Chart Impending Correction Review?

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

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

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

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

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

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

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

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

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Crude Oil Intraday Triple Top!

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

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

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

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

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

 

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

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

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

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

 

 

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Crude Oil Daily Chart Bullish Action Review

The fundamentals regarding crude oil changes as fast as the wind, besides that I bet there isn’t a single analyst that knows what fundamental news made oil rise into last year, and then crash and burn into early 2019.  I sure don’t know as well but the gold/oil ratio sure gave me a clue that it was going to happen.  Even though satellite spying is extremely sophisticated as they can track the floating roofs on storage tanks.

The US has been accused of refined oil product contamination which happened recently in South Korea,  to where they refused shipments.  Of course, they just turned that oil around and sold it to China.

Beside that most fundamentals regarding oil supply and demand can be just pure false news to keep enemies guessing. In today’s world, it is very easy to manipulate the news, so unless you have a Bull Shit Detector App on your smartphone we will never know the facts.

Even though wave counts can be pretty foggy most of the time they still over more “Truth” than fundamental news does.

Yes, oil can go higher but we are at a 20.98:1 Gold/Oil ratio which is the most expensive it’s been since November 2018 when it was at 17.37:1.

Oil seems to love crashing at around 17:1 which it did in the 2014 decline.

Math doesn’t lie only people do, so any gold/oil ratio can supply more objectivity in a world filled with fake news. “Fake News” and “Propaganda” is the same thing, so its not rocket science to see which countries use the most propaganda.

The commercial hedger’s net short positions make the potential for a big bullish move very unlikely, as open interest is also hitting record lows.

There are “No” daily trading limits in crude oil so that does produce some very long free falling type moves. Traders will be piling on the protective sell stops and once they get triggered, there are no daily limits to slow it down.

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Crude Oil Monthly Chart Update

This is the June contract month and from the recent late 2018 bottom, crude oil looks like it wants to soar.  This may happen in the short term but the commercial trader’s positions do not support a major bull market to continue in oil. If the COT report showed that commercials are adding many long positions, then I would think otherwise.

World growth is slowing down and the oil trade wars are not going away as well.   Crude oil has been in a bear market since July  2008. Oil has tried to break out two major times and each time it failed to get its mojo back. The big question is if the 2016 low was the real bull market low, or will oil crash to new record lows again.  A complete retracement would sure confirm that our recent bearish rally has the oil bulls in a bull trap.

This could take the rest of the year to play out so don’t expect anything to happen just yet.

The Gold/Oil ratio became a bit more expensive in the last few weeks or so as it was 22.8:1 today as I post. Now if this same ratio were heading to 30:1 or more then chances are good I would be very bullish on crude oil.

Switching oil to a Cycle degree triangle may only last until the digital paint has dried. March is also a good month for reversals so we just have to have the patience, to see if the oil bear is going to attack again.

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Crude Oil Monthly Chart Death Cross Review

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

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

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

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

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

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

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

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

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

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

 

 

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WTI Crude Oil Update

This March 2019 contract created another spike to the upside which may not be finished just yet. Is the $54-$55 price level resistance. From the bottom, the bullish oil move looks more and more like a 5 wave run.  A 5 wave run that could be part of an expanded pattern never lasts, and eventually, the entire 2019 run should get retraced.  COT report is worthless information until the government shutdown is settled. I do have the Market Vane report still coming in every Tuesday, and it shows 40% bulls are present. 40% is not nearly enough to push a huge bull market, especially if the 24 month high was only 59% bulls.  Now if yesterdays reading was just 20-30% bulls then, I would have to look for a bigger bullish wave count.

The Gold/Oil ratio got a bit more expensive around 24.12:1 but old records make a Gold/Ratio of 17:1 extremely expensive. Incidentally the 25:1 ratio has been hit about 2 times since the 1999 bottom and both times huge bull markets developed. We also have established a new ratio benchmark since then, as 44:1 showed that crude oil was extremely cheap.

Demand for oil also changes with the seasons but any fundamental supply and demand readings are not trustworthy. It’s too easy for any oil player to manipulate, cheat and lie about numbers especially when the oil or gas is still in the ground. Opec is trying to pump up its take on oil because of the Aramco IPO slated for this year.

In Canada, we have the federal government trying to block all pipeline construction because our smiling Photo Bomb leader is trying to turn Canada into a European country.  Canada has wasted its oil opportunity blocking First Nations who want the jobs and economic benefits from higher paying jobs.  What you don’t hear or read about in the media is there are far more First Nations that want to work with oil and mining companies, rather than against them. Native controlled energy companies are out there and more are being formed.

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Crude Oil: Another Spike to the Upside!

 

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

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

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

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

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Crude Oil Bullish Review

So far oil has been having a very bullish January which started in December 2018. This February crude oil chart has now developed a very nice vertical spike to the upside. This is usually a setup for correction or the end of an entire bullish move. A correction and then a leg higher would add a 5th wave to this bullish phase but then oil is facing stiff resistance near the $55 price level. I’m biased to Fibonacci numbers and we are facing the 50-day MA which will also produce resistance. We have a long way to go with price and time before any Death Cross can happen.

We had a Gold/Oil ratio low of just under 30:1, but with this present rally kicking in we are not at a 25.17:1 ratio. Readings of 17:1 has caused an oil price crash several times already. We may never reach any 17:1 ratio this time, but gold/oil ratios could hit a brick wall just the same. The ratio could stall which I can’t see unless I check it several times per week. During November 2018 I had about 14 calculations.

Commercial traders are still net long with the government COT report being delayed due to the government shutdown. It’s kind of ironic when the government is shut down and the stock markets still go up. I’m still bullish on oil but I sure would not take a bullish position when the spike is visible.

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Crude Oil Daily Chart Update

This is the March oil contract month, which is a bit early to use but the end result will be the same. Yes, we hit a bottom, but we may still be a bit too early for another bullish move to crank up. There still may be a little upside to go and I’m taking a chance as one more downside move can also still happen.  The commercial hedgers are still net short crude oil which can keep a lid on oil prices. The speculators are the trend chasers and are building net short positions.

The Gold/Oil ratio tells us a different story as that ratio hit about 30:1 briefly in the last few weeks, but it is sitting at 28.25:1 right now.  44:1 was the last extreme bottom while 17:1 ended up being one of the extreme expensive ratios. Oil has crashed from this 17:1 ratio twice since the July 2008 peak.  Our present crude oil market is 6-7 months shy of a 10-year bear market, with no signs of an impending strong 5 wave run.

When we look at the crude oil monthly chart we can see a crash, then a huge rally and then another crash into the 2016 low. This would make a great looking zigzag crash which may not be finished.

It’s a game of splitting hairs and only short-term trades may work.  One thing is certain and that is if you are a crude oil follower for any reason then use the gold and oil price on a smartphone and calculate the gold/oil ratio several times a week. Using the little Forex gold and oil units works just as well. Making the calculations consistently about 2-3 times per week will get you started.  After a while, you will memorize the extremes and what can happen after extremes get hit.  Don’t try and forecast the price of gold this way as oil is not money, crude oil evaporates into thin air when it is burned but gold can’t be destroyed.

If some clown forecasts gold going to $5000 next year and our present gold/oil ratio is 28:1, then $5000 gold would produce a $178 oil price. Oil at $178 in 2019 is highly unlikely so you know that the gold price forecast is just a pipe dream!  At the 2008 oil peak, bullish oil price forecast was being made with $200-$300 oil prices still to come. All the experts were bullish on oil at that time, yet oil imploded from $147 down to $34 in just 8 months.  The Gold/Oil ratio was at 9:1 at that time and I knew that oil was going to crash.

The idea about gold ratios is that it gives us more of an objective look at the oil price and we can see through the emotions that are always present in any market.

 

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Crude Oil Intraday Bounce Update

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

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

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

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

 

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Crude Oil Intraday Chart: Bears Still In Control!

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

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

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

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Crude Oil Intraday Gyrations Update

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

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

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

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

 

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Crude Oil Daily Chart Crash Update

 

 

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

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

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

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

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

 

 

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January Crude Oil Weekly Chart Update.

 

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

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

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

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

China Inventories Rise 416%

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

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

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

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

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

 

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Crude Oil Crash And Rally Update.

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

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

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

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

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

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

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

 

 

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