Elliott Wave 5.0 "Reboot"

Tuesday, January 12, 2016

WTI Crude Oil Intraday, Monthly Chart Review: And It Keeps On Crashing!

This is the March contract as a daily chart with 500 bars. As of 2016 I will always keep my trend lines parallel to each other, and one move outside these trend lines is not a big thing. 

It is more important to create a sense of stability by keeping the trend lines the same angles, otherwise we are constantly moving the goal posts and after awhile the game has no more meaning. 

We still don't know if a bottom is in but today oil crashed to another record bear market low of just dipping to $29.93 with this March contract. Use the March gold contract and we had a gold/oil ratio a bit over 36:1. This breaks all records that I know about or have seen graphs for how cheap oil is when compared to gold. 

At this point if oil were to keep right on crashing much faster than gold might do then we would hit a stunning gold/oil ratio of about 54:1

This is the same March contract month, but as a weekly chart with a setting of 1500 bars.
My bottom trend line has now been pierced which is not a concern at this time. Since the 2008 peak the crash or two crashes now form a much better looking "ABC" and it will work as a zigzag.  As long as it seems to count out a set of 5-3-5 waves, then I will use it as a zigzag. 

This is all great, but until  WTI turns and leaves a bottom far behind, then this move has not completed just yet. 

I have recreated this SC degree wave count as an example of what I refuse to do. 

 I refuse to make that 2006 correction into a Primary degree wave as it is physically far too small to fit in a 5 wave sequence of Primary degree.  Besides that 2006 correction could have contained a triangle if it were a true impulse wave structure and contain many diagonal waves as well, if such a high degree was ending.  

If we look back to the 90s I see a "XY" wave which should be labeled as a Primary degree move, since it is correcting a Cycle degree 4th wave. Look at the physical size of the Primary degree from the "X" to the "Z" wave and then look at the 2006 Primary degree wave 4 correction. One Primary degree is a monster and the other is a midget. No offense to midgets intended!  They all are still in the same Cycle degree impulse run, but they should not have such a big difference in size. 

I call this false wave counting and will try and avoid doing this at all costs. SC and GSC degree wave counts in stocks have many of these inconsistencies in their wave counts. 

I may not have a chance to update for a few days, but hopefully I will get some updates in on the weekend.