Elliott Wave 5.0 "Reboot"

Monday, February 29, 2016

Crude Oil Daily Chart Month End Review

                               All Eyes on Crude Oil | Elliott Wave International

This is a posting from well over a year ago dated January 2015 but I though it is very important to show readers how easy it is to use WXY waves. Zigzags, flats or otherwise is irrelevant as when in doubt use WXY waves. :)

With this EWI posting the  "Y" wave is pointing towards the $125 price level.
They recognize that crude oil is massively oversold and have been thinking about the bullish phase that is sure to come.

Overall, I believe oil will eventually clear the $115 price level and possibly double top at around $147. If it goes a bit higher would be no problem, but $200 oil would be a problem.

This is the April contract and my wave count has not changed that much as oil seemed to have hit a very oversold bottom on February the11th. There is never any way of being very sure a bottom is in but it has now been 18 days already, which would also make the 11th the low price of 2016.

My pair of parallel lines, points towards $40 as the next potential resistance problem areas. Eventually oil would have to slice through this trend line and keep right on going. 

Our gold/oil ratio will give us a clue, as right now it was a bit below 37:1 When we reach 17:1 and lower, then we have to be awake and take notice.  On the oil crash on the way down, we have three major previous 4th waves to deal with and all of them could provide resistance and correction price levels. 

Since WTI oil crashed from a $36 top to it's last record bear market low with a 3 wave pattern,  then at a minimum WTI should clear that $36 price level sooner than later. Our bear market low so far has been around $28.74, and the longer it holds the better. 

Speculators are adding to their long positions which is very common as they are the trend chasers. 

It may not sound reasonable to be bullish when the entire world is awash in oil. The fact is we are dealing with a narrow percentage of a margin that I figure is a bit under 2%. We have already had "supply destruction" in the USA as the rig count has been dropping dramatically.  Any other hick ups in production levels can drain inventories faster than what they can report on. Fundamentals will always tell us the wrong things at the extremes. 


  Reporters are going wild with stories about how electric cars will cause the next oil crisis, what a pile of crap.  We are already in an oil crisis and beside electric cars have a long way to go before they can gain 50% of all cars being sold, into the market of billions of cars. Besides, one EMP bomb can take out all those fancy electric cars. Even gas guzzlers will be worthless.  Before you know it you will be hooking a horse to an electric car and call it a Tesla buggy, instead of a Bennett buggy.   
                                  Bennett buggy - Wikipedia, the free encyclopedia