Since all this crude oil decline has been diagonal looking most of the time, then chances are good any rally will also be a zigzag type pattern. Back at the December 21st bottom WTI started out rather choppy which instantly should throw up some red flags. Many times we wish otherwise and force the wave count into an impulse, when in reality there is none.
Bad impulse waves do happen so I always apply both wave counts to a move until one has to get thrown out. This may happen at the bottom trend line soon or close to the top of my trend line, for a potential zigzag pattern. WTI has already started a counter rally so it remains to be seen how far it can still go.
If this"C" leg is far smoother and plays out with very high quality wave structures than I am inclined to make it a wave 1-2. It then would also blast through my top trend line, producing some shock and awe to all those that are waiting for $20 oil. If you want $20 oil just come and by our Canada oil!
They are still talking about the glut but high demand numbers for driving oil they want to ignore. Ok, so inventories are high big deal, as last time crude oil was stored
on the water in big oil tankers.
Right now they getting top dollars for tanker rentals as demand have been getting stronger. Using tankers as on water storage for crude oil is nothing new as the last glut they had about 20-25 tankers all use for storage. Fundamental news can change as fast as the wind and it will drive you crazy trying to figure out where the price of crude is going next.
Sure, this move can be a fake as we still have not exceeded the 2008 low, but it can also make a big run as all the fundamental news in the world means nothing at the extremes. Crude oil didn't care one bit what the fundamental news was at the top in 2008 as it was due to crash because of it.
Again the general guideline at the 2008 peak was that, "fundamental news at the extremes will always tell you the wrong things".