Elliott Wave 5.0 "Reboot"

Tuesday, March 15, 2016

WTI Crude Oil Intraday Crash Review: Oh The Horror Of It All!

Everytime we do have a downturn in crude oil I can just hear all the perma bears saying, "I told you so", as the bear market returns. World oil glut numbers will be regurgitated as well as any other new reason they can come up with. Everybody is surprised that oil rallied as much it it has with the fundamentals being they way they are. 

The thing is that fundamentals are a lagging indicator not a leading indicator to any price move. 
Also, reporters and analysts brainwash themselves in an endless loop and they don't see the numbers changing fast enough.   Compared to Elliott Waves, the world herd moves at a glacier slow speed.  

The real bottom was actually closer to January the 20th a full two months ago, it is only this April contract that is not showing us the truth.  The May contract shows a different, much more bullish wave count.   I kept the wave count as a potential Minute degree run and with that we would have to get some pretty aggressive 5th wave extensions. 5th wave extensions are pretty common on commodities so I expect a few here and there to pop up.  There may be a bit more to go down, but then we should expect a reversal with another big leg up.  

 This entire move,  I have as a potential "E" wave bull market in Intermediate degree, but  it would contain a Minor degree inverted "ABC" zigzag type of a pattern.  

With futures charts and the extreme leverage these contracts trade under, there can be very violent moves that are impossible to catch before hand, or post in a timely fashion that readers can use as trade setups. You don't need Elliott Wave to make trade setups as all you need is a few indicators. 

 Trying to catch a falling knife is what Elliott Wave trading is all about, but very few if any can actually practice it.  Fear dominates and most of us don't have the big account to do that with as drawdowns always happen.  

Another low should happen, but after that all bearish bets are off the table. 

Updated 1:33 PM PST

There is a high probability that this decline is ending a bit early, and the 4th wave has already bottomed. We will not know until we get a pretty substaial lead. The last little wave looked like it contained an ending diagonal, but the market will have to confirm it by going much higher.  

Either way there is a high chance that we had an expanded pattern and that single pattern is enough to   remain very bullish. Catching a falling knife on a "C" wave decline is extremely hard to do, and it is far worse when we only have a very small trading account or take a position far to big. I know of an oil trader that was ahead over 2 million in one summer alone, but now has whittled that down to less than 1/2 million, so anyone can lose money in this game.