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The target for upwards movement to end was at 58.05. It has not been met. The Elliott wave count remains the same.

Summary: Downwards movement is now expected to at least 28.61. The target is at 25.59. A new low below 49.96 would add confidence that price has turned downwards.

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 now a complete zigzag.

Minor wave B is a 1.29 length of minor wave A. This is within the normal range of 1 to 1.38. This indicates intermediate wave (B) is an expanded flat, as within it minor wave B is longer than 1.05 the length of minor wave A.

It must be accepted that minor wave B could continue higher while price remains above the confidence point at 49.96. A new low below the start of minuette wave (v) at 49.96 could not be a second wave correction within the last fifth wave up, so at that stage confidence may be had in a trend change.

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

Minor wave C downwards must subdivide as a five wave structure.

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.

Price has broken below the lower edge of the channel, which was drawn on the daily chart in the last analysis. Price behaviour around the upwards sloping green trend line suggests a trend change. Price may now find resistance about the downwards sloping green trend line.



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

For the last five sessions, the two downwards sessions have stronger volume than the upwards sessions. This suggests the trend may now be down.

ADX has today indicated a possible trend change to downwards: the -DX line has crossed above the +DX line. The ADX line is declining though, so no new trend is yet indicated.

The short term Fibonacci 21 day moving average has today turned downwards, but it remains above the mid and long term averages and those both remain pointing upwards. If there has been a trend change, then it is very early.

Price found resistance about 54.15 and 55.55. The next line of support is currently held at 52.05 and then at 50.30.

ATR has had a period of decline as price moved higher. This supports the Elliott wave count because it sees that upwards movement as a B wave. Now ATR may be beginning to increase.

On Balance Volume gives no indication yet of direction. It remains constrained below resistance and above support.

RSI has just crossed over to bearish territory today.

Stochastics is bearish and is not extreme. There is plenty of room for price to fall.

Bollinger Bands are tightly contracted.

This analysis is published @ 10:54 p.m. EST.

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