Elliott Wave 5.0 "Reboot"

Tuesday, March 8, 2016

WTI Intraday Crude Oil Peak Review



It has been a wild ride up defying all the bears and their repeated stories about the world glut and excess world production.   Prices start to react much sooner than the fundamental news will tell you as fundamentals are lagging indicators not leading indicators. Oil is a far cry from heading down to the $20 price level as it is heading the opposite way.  All those parrots that were beating the bearish outlook on oil, will now return if oil starts another strong correction.  

Bearish news will become really bad if oil dips to a new record low one more time. 

To keep this potential impulse alive, we need a correction and not a return to the bear market. Even a correction would take out my bottom trend line, but we could find support at the $34 price level if we are going to get another leg up. 

I may cheat and use that bottom of the 11th as a wave 2, to see if the count stays on track. That bottom will haunt the wave count in oil for a long time, always distorting how we read the waves. 
The GSCI did not confirm oil so there is a huge discrepancy in wave counts between the two.

Right now we are at a gold/oil ratio of about 34:1 which is still extremely cheap when we use gold as money.  This is a good thing as there is lots of room for oil to move upward in the many months to come. 

If the bottom in oil is in then I am looking for a 3 wave bull market that could be an "E" wave in intermediate degree producing a potential "B" wave top in Primary degree.  This may take years to play out as a big correction would also get in the way. 

I recently saw a wave count from EWI in which they are working oil in a SC degree crash. This bottom was a Cycle degree wave three bottom and they have a $60 price target for Cycle degree wave 4.  I have duplicated this wave count already and I scratched my head all the time as sequentially and physically it makes very little sense to me. 

What I have been counting as 5 waves down in Minute degree they called it a  5 wave Cycle degree decline. 
This is a difference of 5 degree levels!  

Most people ignore pattern or how something behaves as technical analysis is just witchcraft, but the knowledge that "ABC"moves do make 100% or more retracements cannot be gained from any other system of analysis. This is not explained or discussed in the book and only makes sense if we believe that Elliott wave is just one big giant idealized pattern.  We can track the origin of this wave count back to about 1859 and just before the era of Rockefeller and his Standard Oil Company.