Elliott Wave 5.0 "Reboot"

Sunday, January 17, 2016

Crude Oil 1990-2016 Elliott Wave Count Review

I say you can never review the big picture often enough as when we don't out wave counts can drift out of a sequence very quickly. The next thing you know we are counting in SC and GSC degree when in reality we are not even close. SC and GSC degree wave counts are not even on the same planet. In the last few years I have given countless reasons why and one big reason is the requirement of any 5 wave sequence in a specific correction or so called bull market. 

I agonized with SC and GSC degree wave counts for more than a decade (joining the herd)  and found myself continually dropping down a degree level to make a better fit.  Physical size has a lot to do with it, but it has to be in sequence first. All SC and GSC degree wave counters have pushed the 2006 correction into a Primary degree wave 3-4. Below I have that exact same wave as a Minute degree wave 3-4. This is a full 3 degrees lower than all of the other wave counters use. 
I do not see EWP as being effective if we ignore physical size within the same 5 wave sequence. One time using a Primary degree correction lasting about 8 years (1990-1999) and then having another Primary degree, correcting only last a bit longer than a year.(2006)

Maybe my wave counts are off planet, but I have no problem with that as we now have hundreds of new planets to choose from. 

Our Canadian Select Crude Oil has hit a low of about $14.20 which makes it one of the lowest prices for crude in the world today. 

I am looking at the crude oil charts as containing one big triangle in a Primary degree "B" wave, and it will take some time for this to get confirmed. Since the 2008 top we are looking at a potential "ABC" crash which just now is starting to look better than it ever has. At least I can fit it into a zigzag, but a flat would also work very well. As long as I can see that I have a potential 5-3-5 count then I call it a zigzag. Zigzags do not have to be perfect, they just need a 5-3-5 count.  

Crude oil has now passed my bottom trend line and I will not adjust my trend line for any reason. I want to use stable trend lines to avoid going into a higher degrees too early. As of Friday I saw a potential expanded flat in progress so this could give us more downside early next week. 

Price will never determine a wave count as oil is a prime example of this. Will $10 be a SC or a GSC degree bottom in oil, and what if it never reaches these numbers? Or will all the high degree wave counters be satisfied once oil hits $20? I doubt it, as chances are good they will miss another major bull market in oil while they are waiting for a $10 oil price and the next depression.  Even though SC and GSC degree wave counts will get destroyed again, they will refuse to give up on high degree wave counts. 

What any "ABC" crash usually means is a complete retracement of the three wave crash in question, yet the high degree wave counters, seem to be oblivious to this development. 

What my wave counts need in the next bullish phase is a 3 wave bull market that may produce a big double top, before another oil crash wipes it all out and produces another world oil glut.  

We will hear many more fundamental horror stories, about oil going to $20 or even $10, but ask yourself where were these guys when oil was at $147.  Also the big question is if oil is going to fall to these low prices, then where is it going "after" these low prices get hit?  They can't tell you because they don't know and they do not want to jump away from the consensus opinion. They will forecast $50 oil when it reaches $49.99 and forecast $100 oil when it reaches $99.99

On Friday I measured one of the most extreme gold/oil ratios ever, coming in at 37:1