Elliott Wave 5.0 "Reboot"

Friday, December 18, 2015

Crude Oil Weekly Chart Review: Another Extreme Gold/Oil Ratio

 I will no longer be using the January 2016 crude oil month as the February month is now the next busiest month. Wave patterns are dramatically different between months and between daily and weekly charts. I can produce many different wave counts and I can make a different version at will just by switching charts.   I'm showing you a wave count that would fit a triangle, but this would give us two triangles in two 4th waves.  I am not too keen on that, but as long as it is in a different degree, I will let it happen for now. 

Oil can still crash, but this morning the gold/oil ratio hit a stunning 30:1 ratio again, matching a previous 30:1 ratio back at the August lows. Even though our 2015 low pattern looks like an ending diagonal, I'm counting it as a normal decline, but with diagonal characteristics. 

 I always use an idealized template, to figure out what is supposed to happen next and not just make pretty wave counts because they look like they fit. The easy ones are never the right wave counts as they are thrown out there to snare the lazy wave counters. 

To stay in sequence of a triangle I will need another three wave bull market, matching or exceeding the 2011-2014 peaks. There is also the possibility that any big bullish run will terminate at a "B" wave in Primary degree, which would be part of a single flat.  Only time will tell what we end up with. 

Our Canadian crude oil is already selling for about $21 but it is called Western Canada Select. I have not located any charts on this oil price, but have read a bit about it. 

The majority always blames the supply of crude as the reason for low oil prices. This is very common and everybody does it.  From my perspective, it is always the price crash that creates the fundamentals. The experts did not see any price crash coming in 2008 and therefore got blindsided by a world oil glut, but many smart contrarians saw a price crash coming. When this oil market does swing to the upside you will see all the bearish news disappear or be reduced. 

The next thing you know all the experts will be forecasting $100-$200 crude oil again.