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Upwards movement has continued as expected from last Elliott wave analysis.

The small consolidation also unfolded as expected and remained above the invalidation point at 46.57.

Summary: The target for upwards movement to end is still about 58.05. Another small consolidation, the last one on the way up to the target, may continue for a few more days.

New updates to this analysis are in bold.


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.

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.

Primary wave 4 may end if price comes up to touch the upper edge of the maroon channel. The upper edge of this channel has been pushed up to sit on the end of intermediate wave (2) within primary wave 3.

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.


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

Intermediate wave (B) still looks like it is unfolding as a flat correction. Within intermediate wave (B), minor wave A is a zigzag and minor wave B is an incomplete zigzag.

Minute wave b fits as an expanded flat correction. Minute wave c must subdivide as a five wave structure.

Within minute wave c, the upwards movement began with two overlapping first and second waves, labelled minuette waves (i) and (ii), and subminuette waves i and ii. Now it must end with two corresponding fourth wave corrections and final fifth waves up.

Subminuette wave iv unfolded as a small correction and remained above subminuette wave i price territory at 49.19.

Now minuette wave (iv) must unfold as a small correction and remain above minuette wave (i) price territory at 46.57. When minuette wave (iv) is complete, then minuette wave (v) upwards should be the final short wave to end upwards movement. Minuette wave (v) would reach equality in length with minuette wave (i) if it is 4.36 in length. When minuette wave (iv) is complete, then the target may be calculated at a second degree and this may change the target or widen it to a small zone.

At 58.05 minute wave c would reach 1.618 the length of minute wave a.

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

When minor wave B is a complete zigzag structure, then a major trend change would be expected still for Oil. Minor wave C downwards must subdivide as a five wave structure.

A small channel is drawn as a best fit about minute wave c. When this channel is breached by downwards movement, it would indicate that minute wave c and minor wave B should be over and that minor wave C down should have begun.

Because intermediate wave (A) fits so well as a three wave structure, it is still most likely that intermediate wave (B) must retrace a minimum 0.9 length of intermediate wave (A) at 28.61. When an A wave subdivides as a three, then a flat correction is indicated.

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



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

The very long upper wick on the candlestick for the 12th of December is bearish. The following day closed green and comes with a decline in volume, and this is also bearish. This supports the Elliott wave count, which expects a small consolidation about here to last a few days.

ADX now indicates an upwards trend in place. ADX is not extreme, so there is room for this trend to continue.

ATR is declining, so this trend may be tiring. Bollinger Bands are contracting. Some consolidation should be expected here, and this supports the Elliott wave count.

Stochastics exhibits divergence with price between the last two highs of the 5th of December and the 12th of December: price has made new highs, but Stochastics has made lower highs while extreme. This indicates either some consolidation before another divergence or a possible trend change here.

RSI is not yet extreme. There is room for price to rise further.

On Balance Volume is bullish. If it turns down, it may find some support at the purple trend line. No line is found at this stage to provide resistance.

This analysis is published @ 01:22 a.m. EST.