Tag Archives: us oil trend

US OIL Elliott Wave Technical Analysis – 13th September, 2017

Downwards movement was expected. Over the last week price has made a lower low and a lower high, but the weekly candlestick so far is green with continued deep bounces.

Summary: The bigger picture for Oil remains bearish. Each time price comes up to touch, or gets very close to the maroon trend line, it should react downwards from there.

The target remains at 34.34. The invalidation point is moved down now to 49.42. A strong increase in downwards momentum is still expected.

New updates to this analysis are in bold.

MONTHLY ELLIOTT WAVE COUNT

US Oil Elliott Wave Chart Monthly 2017
Click chart to enlarge.

Within the bear market, cycle wave b is seen as ending in May 2011. Thereafter, a five wave structure downwards for cycle wave c begins.

Primary wave 1 is a short impulse lasting five months. Primary wave 2 is a very deep 0.94 zigzag lasting 22 months. Primary wave 3 is a complete impulse with no Fibonacci ratio to primary wave 1. It lasted 30 months.

There is alternation in depth with primary wave 2 very deep and primary wave 4 shallow. There is inadequate alternation in structure, both are of the zigzag family, but there is some alternation within structure. Primary wave 2 is a single zigzag and the triangle for intermediate wave (B) gives it a sideways look. Primary wave 4 is a sharper and quicker double zigzag.

If it continues, then primary wave 4 may not move into primary wave 1 price territory above 74.96.

WEEKLY ELLIOTT WAVE COUNT

US Oil Elliott Wave Chart Daily 2017
Click chart to enlarge.

The wave count sees primary wave 5 beginning with a leading diagonal for intermediate wave (1), and now a deep expanded flat for intermediate wave (2). This has good proportion, and fits at the daily chart level.

Intermediate wave (3) may have now begun. It may only subdivide as an impulse. Within intermediate wave (3), minor waves 1 and 2 may be complete.

Price continues to find resistance just below the upper edge of the maroon channel, which is copied over from the monthly chart. Assume this wave count shall have the right look while price remains below that trend line. Only would an alternate be considered if that trend line is breached.

Within minor wave 3, no second wave correction may move beyond the start of its first wave above 50.43.

DAILY ELLIOTT WAVE COUNT

US Oil Elliott Wave Chart Daily 2017
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It looks like price is continuing to find very strong resistance at the upper maroon trend line, which is copied over from monthly and weekly charts.

Minor wave 3 is starting out slowly. Oil does seem to have a tendency to begin its impulses slowly, accelerate towards the middle, and end with very strong fifth waves. This tendency is typical of commodities. A good example may be seen on the monthly chart with the slow start to cycle wave c: primary wave 1 was very short, primary wave 2 was deep and time consuming, and primary wave 3 began with another short wave for intermediate wave (1) and another deep correction for intermediate wave (2).

When this third wave gets going, it should then exhibit a strong increase in downwards momentum.

The target for minor wave 3 remains the same.

Subminuette wave ii may not move beyond the start of subminuette wave i above 49.42. If it does continue higher, then expect it to find very strong resistance at the upper maroon trend line. That line should not be breached if this wave count is correct.

TECHNICAL ANALYSIS

DAILY CHART

US Oil Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Recent days’ strongest volume is for downwards movement through the months of May to August. This strongly suggests that the larger trend is still down and upwards movement is still a counter trend movement. So far this year Oil has made a series of lower lows and lower highs, the definition of a downwards trend, although the bounces have been deep and time consuming.

For the shorter term, Oil entered a smaller consolidation range about the 25th of July. Resistance is about 50.40 and support is about 46.45 to 45.60. During this consolidation, it is the downwards day of the 10th of August that has clearly stronger volume suggesting a downwards breakout from this smaller consolidation.

ADX, ATR and Bollinger Bands all indicate that price is consolidating.

With Stochastics just returning now from oversold and price close to resistance, expect a downwards swing for the short term.

VOLATILITY INDEX

OVX Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Normally, volatility should decline as price rises and volatility should increase as price falls. Divergence from this normal can provide a bullish or bearish signal for Oil. However, it is noted that this signal occurs both in minor and major lows and it cannot be used to distinguish between them.

No new short term divergence is noted between price and volatility. It is noted that the correlation co-efficient indicates that currently these markets are not inversely correlated.

TRADING ADVICE

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MONTHLY ELLIOTT WAVE COUNT – JULY 2014

US Oil Elliott Wave Chart Monthly 2014
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This is from the 2014 archives.

I have had for a long time a bearish outlook for US Oil. Back in 2014 I even received some disparaging comments about it, but that’s okay because the record shows that so far the bigger picture was right.

I did struggle for some time with cycle wave b: how to label it, where it ended, and what would be the subsequent structure after it. But this came right some time later and now I am more comfortable with how this movement is currently labelled.

On the post for July 2014, the weekly chart target for the mid term was 74.53.

Published @ 03:52 a.m. EST.

[Note: Analysis is public today for promotional purposes. Specific trading advice and comments will remain private for members only.]

Continue reading US OIL Elliott Wave Technical Analysis – 13th September, 2017

US OIL Elliott Wave Technical Analysis – 20th June, 2017

Last week the main wave count expected a continuation of downwards movement, which is what has happened. This week members are offered advice on how to manage short positions, which were opened after a channel was breached on the 25th and 26th of May.

Continue reading US OIL Elliott Wave Technical Analysis – 20th June, 2017

US OIL Elliott Wave Technical Analysis – 19th April, 2017

A break below the small best fit channel on the daily chart indicated a trend change for US Oil.

Members were then advised to enter a short position. Short positions are now positive.

Summary: The target is at least a new low below 47.06; it should be comfortably below that point.

New updates to this analysis are in bold.

MONTHLY ELLIOTT WAVE COUNT

US Oil Elliott Wave Chart Monthly 2016
Click chart to enlarge.

Within the bear market, cycle wave b is seen as ending in May 2011. Thereafter, a five wave structure downwards for cycle wave c begins.

Within cycle wave c, at this stage it does not look like primary wave 5 could be complete. That would only be possible if primary wave 4 was over too quickly.

Primary wave 1 is a short impulse lasting five months. Primary wave 2 is a very deep 0.94 zigzag lasting 22 months. Primary wave 3 is a complete impulse with no Fibonacci ratio to primary wave 1. It lasted 30 months.

Primary wave 4 is likely to exhibit alternation with primary wave 2. Primary wave 4 is most likely to be a flat, combination or triangle. Within all of these types of structures, the first movement subdivides as a three. The least likely structure for primary wave 4 is a zigzag.

Primary wave 4 is likely to end within the price territory of the fourth wave of one lesser degree; intermediate wave (4) has its range from 42.03 to 62.58.

If primary wave 4 is incomplete, then it looks like it may not remain contained within the channel. Sometimes fourth waves overshoot channels and this is why Elliott developed a second technique to redraw the channel when it does not contain a fourth wave.

Primary wave 4 is most likely to be shallow to exhibit alternation in depth with primary wave 2. So far it has passed the 0.382 Fibonacci ratio at 45.52. It may now continue to move mostly sideways in a large range.

Primary wave 4 may not move into primary wave 1 price territory above 74.96.

At this stage, primary wave 4 has completed intermediate wave (A) only. Intermediate wave (B) is incomplete.

WEEKLY ELLIOTT WAVE COUNT

US Oil Elliott Wave Chart Daily 2016
Click chart to enlarge.

The whole structure of primary wave 4 is seen here in more detail.

The first wave labelled intermediate wave (A) is seen as a double zigzag, which is classified as a three.

Intermediate wave (B) is also a three. This means primary wave 4 is most likely unfolding as a flat correction if my analysis of intermediate wave (A) is correct. Flats are very common structures.

Intermediate wave (B) began with a zigzag downwards. This indicates it too is unfolding most likely as a flat correction.

Within intermediate wave (B), the zigzag upwards for minor wave B is a 1.29 correction of minor wave A. This indicates intermediate wave (B) may be unfolding as an expanded flat, the most common type.

The normal range for intermediate wave (B) within a flat correction for primary wave 4 is from 1 to 1.38 the length of intermediate wave (A) giving a range from 26.06 to 16.33.

Primary wave 4 may not move into primary wave 1 price territory above 74.96.

Within the larger expanded flat correction of primary wave 4, intermediate wave (B) must retrace a minimum 0.9 length of intermediate wave (A) at 28.61 or below.

DAILY ELLIOTT WAVE COUNT

US Oil Elliott Wave Chart Daily 2016
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Minor wave C downwards must subdivide as a five wave structure.

Within minor wave C, minute waves i and ii should be complete and minute wave iii must be incomplete. Upwards movement, which is labelled minuette wave (ii), cannot be minute wave iv as it overlaps back into minute wave i price territory.

Within minute wave iii, minuette wave (i) is complete and minuette wave (ii) now looks most likely to be over.

A small best fit channel is drawn about the zigzag of minuette wave (ii). This channel is now breached providing trend channel confirmation of a trend change. This wave count would now expect an increase in downwards momentum.

Minuette wave (iii) must make a new low below the end of minuette wave (i) at 47.06. It must move far enough below that point to allow for subsequent upwards movement for minuette wave (iv) to unfold and remain below minuette wave (i) price territory.

Within minuette wave (iii), no second wave correction may move beyond the start of its first wave above 53.76.

The cyan trend line is drawn from the high labelled minor wave B to the next swing high labelled minute wave ii. This is a Magee trend line for a bear market. Expect that US Oil is most likely in a downwards trend as long as price remains below this cyan trend line.

TECHNICAL ANALYSIS

DAILY CHART

US Oil Chart Daily 2015
Click chart to enlarge. Chart courtesy of StockCharts.com.

The candlestick of the 12th of April completes a Bearish Engulfing Candlestick reversal pattern. The important condition for this pattern (where the close of the second candlestick is below the open of the first) is met. This is one of the most reliable reversal patterns. It works more often than not, but not always. An example of it not working is shown on the 3rd of April.

The reversal pattern of the 12th of April has support from volume whereas the 3rd of April did not. This increases the probability that price may reverse here.

The long lower wick on the last daily candlestick for the 18th of April is bullish, as is stronger volume to support upwards movement of price during the session (indicated by On Balance Volume moving higher for this session). This bounce may move a little higher.

New trend lines are drawn on On Balance Volume. These do not yet have good technical significance, so a breach here would be only a weak signal.

VOLATILITY INDEX

OVX Chart Daily 2015
Click chart to enlarge. Chart courtesy of StockCharts.com.

Normally, volatility should decline as price rises and volatility should increase as price falls. Divergence from this normal can provide a bullish or bearish signal for Oil.

For the last session, here dated the 18th of April, volatility has declined below the 11th of April but price has not made a new high. This divergence is bearish and supports the idea of a trend change here for Oil.

This analysis is published @ 03:07 a.m. EST.

[Note: Analysis is public today for promotional purposes. Member comments and discussion will remain private.]

Continue reading US OIL Elliott Wave Technical Analysis – 19th April, 2017

US OIL Elliott Wave Technical Analysis – 12th April, 2017

Again, last week expected downwards movement from US Oil but price continues higher. The main Elliott wave count was invalidated leaving only one wave count now, which was last week’s alternate.

Continue reading US OIL Elliott Wave Technical Analysis – 12th April, 2017

US OIL Elliott Wave Technical Analysis – 4th April, 2017

Price has moved higher over the last few days.

Continue reading US OIL Elliott Wave Technical Analysis – 4th April, 2017