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The triangle completed sideways and was followed by upwards movement, as expected.

The target is recalculated today.

Summary: I expect a zigzag is completing upwards. The target is at 51.14 to 51.2. If it is met in three days time, the correction would last a Fibonacci 34 days in total, give or take up to two days either side of this expectation.

Changes and additions to last analysis are bold.


US Oil Elliott Wave Chart Monthly 2014
Click chart to enlarge.

US Oil has been in a bear market since August 2013. While price remains below the upper edge of the maroon channel drawn here and below the 200 day simple moving average it must be accepted that the bear market most likely remains intact. I will not publish a bull wave count while this is the case and while there is no technical confirmation of a trend change from bear to bull.

The structure of cycle wave c is incomplete.

This wave count sees US Oil as within a big super cycle wave (II) zigzag. Cycle wave c is highly likely to move at least slightly below the end of cycle wave a at 32.70 to avoid a truncation. Cycle wave c may end when price touches the lower edge of the big teal channel about this zigzag.

It is just possible that cycle wave c could be complete at the last low of 37.75. However, that would see cycle wave c truncated by 5.05, which is a large truncation. I would consider this possibility only if it is confirmed with a clear breach of the maroon channel on the monthly chart.

Within cycle wave c, primary wave 5 is expected to be extended which is common for commodities.

Within primary wave 5, no second wave correction may move beyond its start above 62.58.

Draw a channel about this unfolding impulse downwards. Draw the first trend line from the highs labelled primary waves 2 and 4 then place a parallel copy on the end of primary wave 3. Next push up the upper trend line slightly to contain all of primary waves 3 and 4. Copy this channel over to the daily chart. The upper edge should provide resistance.


US Oil Elliott Wave Chart Daily 2014
Click chart to enlarge.

The intermediate degree corrections were brief and shallow within primary wave 3 down. Now, within primary wave 5, this correction for intermediate wave (2) is neither brief nor shallow.

Minor wave B may have continued sideways and minute wave e of the triangle may have unfolded as a double.

At 51.14 minor wave C would reach 0.618 the length of minor wave A. This is close to the 0.618 Fibonacci ratio of intermediate wave (1) which is at 51.20.

Intermediate wave (2) is likely to find resistance at the upper edge of the maroon channel copied over from the monthly chart.

At 22.21 primary wave 5 would reach 0.618 the length of primary wave 3.

Intermediate wave (2) may not move beyond the start of intermediate wave (1) above 61.82.

Draw a channel about intermediate wave (2) using Elliott’s technique for a correction: draw the first trend line from the start of minor wave A to the end of minor wave B, then place a parallel copy on the end of minor wave A. Minor wave C may end midway within the channel. When the channel is clearly breached by subsequent downwards movement it shall provide trend channel confirmation that intermediate wave (2) may be over and intermediate wave (3) may have begun.

Once intermediate wave (2) is over, if price turns down as expected, then look for some support initially about the lower edge of the blue channel. If price breaks below support there, then look for a throwback to that trend line. If a throwback to the line ends at resistance, at the line, then the trend line strength is reinforced. When price behaves like that it provides a perfect opportunity to join a trend.


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

Monthly Chart: Price is finding resistance just below a prior area of support.

The last big fall in price was well supported by a rise in volume. Importantly, the rise in price over the two months to May this year was clearly not supported by volume. This indicates the trend remains down; a new bull market for US Oil is not indicated by volume.

There is some bullish divergence between RSI and price; as price made the last low RSI made a higher low. This indicates a waning trend but does not indicate exactly where the trend will end.

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

Daily Chart: Since 27th August the black ADX line has steadily pointed downwards indicating at first an expiring trend and now a consolidation. Price continues to drift sideways within the two sloping lines of support and resistance. During this consolidation, it is an upwards day which has strongest volume indicating an upwards breakout may be more likely. This is in opposition to the Elliott wave count, although that does expect some upwards movement.

Price is finding resistance about the horizontal trend line which previously provided some support. If price breaks above the first horizontal line of resistance, then it may find resistance at each subsequent line.

A breakout from this triangle would be indicated by a breach of either of the sloping blue trend lines, up or down, coming on a day with an increase in volume.

This analysis is published about 03:55 a.m. EST.