Downwards movement continues exactly as expected for US Oil.
Summary: Oil is in a fifth wave to end a third wave impulse. Commodities often exhibit swift strong fifth waves, particularly fifth waves to end their third waves. The target remains the same at 29.21. At this stage, there is no warning of a trend change. The trend is down.
New updates to this analysis are in bold.
MONTHLY ELLIOTT WAVE COUNT
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.
Within cycle wave c, primary wave 5 is expected to be extended which is common for commodities.
No second wave correction may move beyond the start of its first wave above 50.93 within intermediate wave (3).
Draw a channel about this unfolding impulse downwards. Draw the first trend line from the lows labelled primary waves 1 to 3, then place a parallel copy up not the high labelled intermediate wave (2), so that all movement is contained. Add a mid line. Copy the channel over to the daily chart.
DAILY ELLIOTT WAVE COUNT
At 26.1 intermediate wave (3) would reach equality in length with intermediate wave (1).
Minor waves 1 and 2 are complete within intermediate wave (3).
Minor wave 3 is an incomplete impulse.
At 29.21 minute wave v would reach equality in length with minute wave iii. Both minute waves iii and v would be extended. Minute wave v may be stronger and may be relatively swift.
So far minor wave 3 has lasted 53 days. It does not look now like it could complete in a further two days to total a Fibonacci 55. The next number in the sequence is 89 which would see it continue for a further 36 days.
Both the pink channel and the maroon midline are now breached. These lines may now provide resistance for upwards corrections along the way down.
No second wave correction may move beyond its start above 38.39 within minute wave v.
If targets are wrong, they may be too high. Expect surprises for this market to be to the downside at this time.
Click chart to enlarge. Chart courtesy of StockCharts.com.
The volume profile continues to be bearish. As price falls volume rises, supporting the fall in price. As price rises volume falls.
RSI shows no divergence with price. Price has made a slightly higher low from the last low three days ago and RSI has done the same.
ADX is between 35 and 45; price is definitely trending. The trend is down. When ADX rises to 45 or above then the trend would be overextended. It is not there yet.
ATR agrees that the market is trending.
On Balance Volume shows no divergence with price. The blue line provides support and should be expected to continue to do so.
MACD shows no divergence with price.
At this stage, there is no warning of a short term interruption to this trend. This analysis agrees with the Elliott wave count.
As price continues lower it should find resistance at the 9 day EMA for small corrections along the way down.
This analysis is published @ 06:25 p.m. EST.