Elliott Wave 5.0 "Reboot"

Saturday, January 9, 2016

Crude Oil Intraday Chart Review: Scotty, Impulse Power Please!




You have to have a bit of fun with Elliott Wave otherwise it will drive you nuts and turn postings into mundane drone like reports. Maybe they already do, but reporting the opposite of what we see is not something the majority will agree with at any given time. If I gave you a wave count that was still going to $20 or even $10 then I am just following the crowd and we would always miss every major turning point. It takes time to reverse thinking, which most Elliott Wave analysts do not consider. 

On Thursday WTI crude oil hit a bottom at just above $32.10 and at this time is still holding. What followed sure looks like an impulse, but the 5th wave is rather short looking. This may already present a problem, but we will not find out until this bottom is actually breached.

For this to carry on as an impulse then WTI would have to add on many more impulse legs as it would just be getting started. If my "D" wave bottom is real and not just a figment of my imagination,  then I would be looking for a major 3 wave bull market as an "E" wave in Intermediate degree. 

The wave counts I am starting with are down at the Micro and lower degree levels, which makes the wave counts very sensitive in being wrong, but knowing that we are wrong early is better than not knowing we are wrong decades later. Many wave counters are still trying to ram SC and GSC degree wave counts down our throats when in fact none of them have ever been confirmed.

When we count the WTI 1999 - 2008 bull market in oil we can count 7 clear waves, which is not an impulse, but they are corrective in nature or diagonal waves. Forcing a small physical wave into a big Primary degree wave structure is forcing a wave count to where it does not belong.  I know, I counted it as well, but it never felt right in doing so. In fact, I changed many wave counts because physical size was so distorted in relation to the same degree that it is laughable now when I look back. 

Nothing is for certain when these leveraged futures are involved, as they produce insane patterns and insane moves that you would never see in the normal stock markets. 

Even if this heads to a new low, I have to remain bullish for the longer term as the gold/oil ratio just hit an insane reading of 34:1 last week. Bullish consensus also has hit a record low, but in August of 2015 at 9% bulls.  This is also one of the lowest bullish readings I have seen as well.