If It is a bearish wave count or a bullish wave count, I have to keep both until one is eliminated. With all the spikes to the upside, this gives me an indication that all the short players are getting trapped. The last few waves looked like a diagonal pattern, from which a correction should happen.
It is not necessarily how deep any decline can go, but it is all about the pattern it makes on the downward slide.
In this case I use a
.618 correction all the time, or the previous 4th wave will also be a target price level. Between $33.40 and $32.40 would be an ideal turning price range, if the impulse wave is still in progress. If an "ABC" forms, then I will turn bullish once again.
I read about one guy wondering why oil was going up with inventory levels being so high? Fundamentals will always tell us the wrong things at the extremes. In Kurdistan their main pipeline has been blown up with no shipping of oil. This was close to 600,000 barrels of crude oil taken off line everyday. This amounts to just under 1/2 of all excess per day oil production! Supply destruction is also in progress in the USA and I'm sure there is more to come.
North Sea oil is also running low as that field is getting pretty old. One day the reverse will happen when they start crying about another world oil shortage with yet another $200 Peak Oil II price forecast. Sure, it still may take a few years, but if we hear any stupid $200 crude oil forecast when crude oil is pointing up, then Peak Oil II will be close at hand, and an oil crash would be imminent.
Markets will never do what the herd of people generally expects as if they did, everybody would be a trader and filthy stinking rich!