Downwards movement continued as expected. I have a new alternate Elliott wave count for you to consider today.
The short term target has been updated.
Sideways movement was expected for the short term, and overall downwards movement was expected this week.
Downwards movement continued, but fell short of the target at 1,217 by $5.58.
Another red candlestick and a slight new low fit the Elliott wave count.
A red candlestick for Friday’s session fits the Elliott wave count, but more downwards movement was expected.
Summary: Intermediate wave (2) is unfolding as a big flat correction.
I expect more downwards movement for a few days to at least 1,190.04. It is possible we may see a new low below 1,183.06.
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Main Wave Count
On the weekly chart extend the triangle trend lines of primary wave 4 outwards. The point in time at which they cross over may be the point in time at which primary wave 5 ends. This does not always work, but it works often enough to look out for. It is a rough guideline only and not definitive. A trend line placed from the end of primary wave 4 to the target of primary wave 5 at this point in time shows primary wave 5 would take a total 26 weeks to reach that point, and that is what I will expect. Primary wave 5 has just completed its 15th week.
At 956.97 primary wave 5 would reach equality in length with primary wave 1. Primary wave 3 is $12.54 short of 1.618 the length of primary wave 1, and equality between primary waves 5 and 1 would give a perfect Elliott relationship for this downwards movement.
However, when triangles take their time and move close to the apex of the triangle, as primary wave 4 has, the movement following the triangle is often shorter and weaker than expected, and this is my main reason for presenting the alternate wave count to you. If the target at 956.97 is wrong it may be too low. In the first instance I expect it is extremely likely that primary wave 5 will move at least below the end of primary wave 3 at 1,180.40 to avoid a truncation. When intermediate waves (1) through to (4) within primary wave 5 are complete I will recalculate the target at intermediate degree because this would have a higher accuracy, and the target may move higher. I cannot do that yet; I can only calculate it at primary degree.
Movement comfortably below 1,180.84 would provide further confidence in this main wave count as at that stage an alternate idea which sees primary wave 4 as continuing as a barrier triangle would be invalidated. I am not publishing this alternate idea as a chart because it has an extremely low probability.
Intermediate wave (2) may end close to a Fibonacci ratio of intermediate wave (1). Only because second waves are more commonly deep than shallow is the 0.618 ratio at 1,280.80 slightly favoured. But it does not have to be this deep. When we know where minor wave B has ended then I can calculate a target for intermediate wave (2) to end.
Intermediate wave (1) lasted 62 days. For the wave count to have the right look intermediate wave (2) should continue for longer than it has so far. Intermediate wave (2) is unfolding as a flat correction, subdividing 3-3-5. Within it minor wave B downwards must subdivide as a three, and may make a new low below the start of minor wave A at 1,183.06 as in an expanded flat. Minor wave A lasted 11 days, and I would expect minor wave B to be at least 11 days and maybe longer as B waves tend to be more time consuming structures.
Because upwards movement for minor wave A has a perfect fit as a double zigzag we can rule out the possibility that intermediate wave (2) is unfolding as a combination. Within a combination the maximum number of corrective structures is three, and so each correction within a combination labeled W, Y (and Z) may only subdivide themselves as simple A-B-C corrections (or A-B-C-D-E triangles), they may not subdivide as W-X-Y.
Because minor wave A upwards is a corrective three wave structure this indicates intermediate wave (2) is a flat correction. Within a flat minor wave B must reach a minimum 90% length of minor wave A at 1,190.04.
The depth of minor wave B will indicate what type of flat is unfolding. If it ends between 90% to 104% of minor wave A then a regular flat may be unfolding, which would expect minor wave C to be about the same length of minor wave A. If it is 105% or longer this would indicate an expanded flat is unfolding and minor wave C would be likely to be 1.618 or 2.618 the length of minor wave A.
The most common length for minor wave B within a flat is between 100% to 138% the length of minor wave A, between 1,183.22 and 1,155.79.
So far within minor wave B downwards minute wave a is most likely incomplete. I have adjusted the wave count within downwards movement to have better proportions. There is no Fibonacci ratio between minuette waves (iii) and (i) and so I would expect to see a Fibonacci ratio between minuette wave (v) and either of (i) or (iii). At 1,219 minuette wave (v) would reach equality in length with minuette wave (i).
If minute wave a subdivides as a five wave structure then minor wave B would be unfolding as a zigzag. Within a zigzag minute wave b may not move beyond the start of minute wave a above 1,255.40.
Within minute wave a if minuette wave (iv) continues further it may not move into minuette wave (i) price territory above 1,240.55. It is extremely unlikely that minuete wave (iv) would move higher, as it is already much longer in duration than minuette wave (ii).
Use Elliott’s second technique to draw a channel about minute wave a. Expect the fifth wave to most likely end midway within the channel, or less likely at the lower edge.
It is possible that minute wave a is a complete three wave structure because 1-2-3 and A-B-C subdivide in exactly the same way. I am not charting this idea for you though because I consider it has too low a probability. Minute wave a would be far to short and brief for a flat correction to reach down to 1,190.04 or below. If the first invalidation point at 1,240.55 is breached before a fifth wave down is complete then I would consider this idea. At that stage if minute wave a is a three wave structure minute wave b should be a very deep correction, and may make a new high above the start of minute wave a at 1,255.40. So a breach of 1,240.55 on Monday would indicate a new high is possible.
Alternate Wave Count I
It is possible that the double zigzag is a completion of intermediate wave (2), but this idea has a very low probability.
This would see intermediate wave (2) only 45% of intermediate wave (1), but more importantly it would have lasted only 11 days in comparison to the 62 days for intermediate wave (1). This is too brief to give the wave count the “right look” on the daily chart.
This alternate also expects downwards movement. If price moves below 1,231.78 then only careful attention to structure (is it a three or a five?) of the next wave down would tell if this alternate is correct or if intermediate wave (2) is continuing as a flat correction.
At 993 intermediate wave (3) would reach 1.618 the length of intermediate wave (1).
Alternate Wave Count II
By simply moving the degree of labeling within primary wave 5 downwards all up one degree it is possible that primary wave 5 and so cycle wave a are over.
This wave count is reduced in probability by a small truncation. Primary wave 5 would be truncated by $2.66. The truncation is small though, so this wave count must be considered.
Movements out of triangles are often more brief and weak than expected, sometimes they are surprisingly brief. There is a nice example of what I mean by this here on the daily chart: after the triangle of intermediate wave (4) we saw a surprisingly quick short intermediate wave (5) down afterwards.
If price breaks out of the upper edge of the parallel channel about cycle wave a (look to the weekly chart for this channel) this would be first indication that this wave count is correct. This trend channel confirmation would come before price confirmation above 1,345.22.
The first movement upwards for cycle wave b should be a five wave structure. Within it no second wave correction may move beyond the start of its first wave below 1,183.06.
Movement above 1,345.22 would invalidate the main wave count and confirm this alternate.
At this stage upwards movement is not looking like an unfolding impulse because it is too choppy and overlapping, and so this alternate wave count is further reduced in probability.
This analysis is published about 05:55 p.m. EST.
Sideways movement has confirmed an end to minor wave 1.
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At this stage it looks like minor wave 2 may be a shallow correction, maybe only reaching up to the 0.382 Fibonacci ratio of minor wave 1 at 18.408. Second waves are most commonly deep corrections, but they are not always deep. That is a tendency not a rule.
So far minor wave 2 may be labeled minute wave a-b-c or w-x-y.
So far the first upwards movement within minor wave 2 subdivides as a zigzag. This may be either minute wave a within a flat correction for minor wave 2, or the first zigzag in a double zigzag for minor wave 2, or a zigzag as the first structure of a combination for minor wave 2.
If minor wave 2 is a flat correction then within it minute wave b must reach a minimum 90% length of minute wave a at 16.799. Minute wave b must subdivide as a three wave structure.
If minor wave 2 is a double zigzag then minute wave x should be a relatively shallow correction. The purpose of double zigzags is to deepen a correction when the first zigzag does not move price deep enough. To achieve this purpose their X waves are normally very shallow.
If minor wave 2 is a double combination then minute wave x be a deep correction. The purpose of double combinations is to take up time and move price sideways. To achieve this purpose their X waves are commonly rather deep (and may be very time consuming).
Within minute wave b downwards (or minute wave x) at 16.673 minuette wave (c) would reach 1.618 the length of minuette wave (a).
If minor wave 2 is an expanded flat or combination then minute wave b or x may make a new price extreme beyond the start of minute wave a or w. A new low below 16.685 is possible. There is no lower invalidation point for this reason.
I am changing the wave count at the daily chart level. I have more confidence in this wave count today.
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Sideways movement over the last week or so fits nicely as a barrier triangle. Now minute waves ii and iv are better in proportion, and the wave count has a better look.
Minute wave ii was a very deep expanded flat and minute wave iv is a very shallow triangle; there is good alternation between them.
I would expect a short fifth wave to follow the barrier triangle of minute wave iv. At 19.47 minute wave v would reach equality in length with minute wave i. As there is no Fibonacci ratio between minute waves iii and i it is more likely that minute wave v would exhibit a Fibonacci ratio with either of i or iii, and equality with minute wave i is the most common ratio. This target has a very good probability.
Ratios within minute wave iii are: minuette wave (iii) is 0.40 short of 2.618 the length of minuette wave (i), and minuette wave (v) is just 0.04 longer than equality with minuette wave (i). This gives a little more confidence that this portion of the wave count is right.
Redraw the channel about minor wave 1: draw the first trend line from the highs labeled minute waves ii to iv, then place a parallel copy on the low labeled mintue wave iii. I would expect minute wave v to end midway within the channel or about the lower edge, with midway more likely.
While minute wave v is unfolding no second wave correction within it may move beyond the start of its first wave above 21.23.
As soon as minute wave v may be seen as complete then the invalidation point must move right up to the start of minor wave 1 at 27.78. Minor wave 2 should last at least a couple of weeks and may be very deep.
The long term target remains the same. At 14.13 intermediate wave (5) would reach equality in length with intermediate wave (1). Intermediate wave (5) should last several more weeks. It is already longer in duration that intermediate wave (1).
Movement below 1,231.78 has clarified the situation.
Today the situation is remarkably unclear, even after about two weeks of confidence with this second Elliott wave correction. I have three scenarios for you today.
Upwards movement continues as expected. The double zigzag structure is now the only Elliott wave count I have for you.
The target at 84.65 was comfortably passed and the structure is incomplete.
Summary: The new target for this wave to end is 79.67 – 78.15, which may be met within one to two weeks.
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The bigger picture sees US Oil in a super cycle second wave correction unfolding as a huge zigzag. Within the zigzag cycle wave a subdivides best as a five, indicating a zigzag, and cycle wave b is a complete double zigzag.
If cycle wave b were to continue any higher it may not move beyond the start of cycle wave a above 146.73.
Cycle wave c is most likely to end when price finds support at the lower edge of the large channel.
Within cycle wave c intermediate wave (3) would reach 2.618 the length of intermediate wave (1) at 53.92.
Depending on the length of this third wave I may consider moving the labeling within cycle wave c all up one degree.
Intermediate wave (1) down looks like a five wave impulse and intermediate wave (2) upwards looks like a clearly contrasting correction with a lot of choppy overlapping movement.
Within intermediate wave (3) minor wave 1 is close to completion. When it is done I will draw a Fibonacci retracement along its length and expect minor wave 2 to end about the 0.382 Fibonacci ratio in the first instance, and the 0.618 Fibonacci ratio slightly less likely. Because this would be a second wave correction within a third wave it may be more shallow and brief than otherwise.
Minor wave 2 may not move beyond the start of minor wave 1 above 107.54.
Minor wave 1 is ending with a typically strong fifth wave.
Within minor wave 1 minute wave iii is 0.52 short of 6.854 the length of minute wave i. At 78.15 minute wave v would reach equality in length with minute wave iii.
Within minute wave v there is no Fibonacci ratio between minuette waves (iii) and (i). I would expect to see a Fibonacci ratio between minuette wave (v) to either of (i) or (iii). At 79.67 minuette wave (v) would reach equality in length with minuette wave (i).
I favour the upper end of this target zone because it is calculated at a lower degree.
Draw a channel about minute wave v using Elliott’s first technique: draw the first trend line from the lows of minuette waves (i) to (iii), then place a parallel copy on the high of minuette wave (ii). I would expect minuette wave (v) to find support and end at the lower edge of this channel.
When this green channel is breached by at least one full daily candlestick above it and not touching the upper green trend line then I would take that as trend channel confirmation that minor wave 1 is over and minor wave 2 is underway.
Minor wave 2 may not move beyond the start of minor wave 1 above 107.67.
Upwards movement continues as expected. The double zigzag structure is even more likely and has the best fit.