It looks like the third wave is finally over at 43.58, just $0.85 below the final target calculated at 44.43.

Summary: I expect choppy overlapping movement for about 28 to 34 weeks in total (another 26 to 32 weeks following the date of this analysis) for a sideways fourth wave correction at intermediate degree. The target for it to end is 53.61 to 59.03. It may include a new low below 43.58. US Oil has entered a consolidation phase.

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Intermediate wave (4) may not move back into intermediate wave (1) price territory above 91.76.

Draw a channel about this downwards movement using Elliott’s first technique: draw the first trend line from the ends of intermediate waves (1) to (3), then place a parallel copy on the high of intermediate wave (2). I would expect intermediate wave (4) to find resistance at the upper edge of the channel, and it may end there.

Intermediate wave (2) was a deep 78% double combination. Given the guideline of alternation I would expect intermediate wave (4) to be more shallow. It may be a zigzag, flat or triangle most likely. If it is an expanded flat or running triangle it may include a new low below its start at 43.58.

Intermediate wave (4) would be most likely to end at either the 0.236 or 0.382 Fibonacci ratios of intermediate wave (3).

Intermediate wave (4) may end within the price territory of the fourth wave of one lesser degree. Minor wave 4 price territory is from 53.61 to 59.03. This indicates a very shallow correction for intermediate wave (4) may be more likely, reaching only to the 0.236 Fibonacci ratio about 53.95.

The pink channel is drawn about intermediate wave (3) as a best fit. When this channel is breached that would provide further confidence in this wave count.

I expect intermediate wave (4) to last about the same duration as intermediate wave (2) which was 28 weeks. It may be a little longer, lasting a Fibonacci 34 weeks.

This third wave has blitzed all targets so far, and the structure is incomplete.

Summary: The next possible point for this to end is about 44.43. A new high above 57.14 would provide price confirmation that the downwards fall is over for the mid term.

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Intermediate wave (4) to come may not move back into intermediate wave (1) price territory above 91.76.

Intermediate wave (3) is not finished, but it is getting very close.

Within intermediate wave (3) a recent triangle for minor wave 4 indicates that the final fifth wave may be unfolding.

At 44.43 minor wave 5 would reach 0.236 the length of minor wave 3. Because minor waves 1 and 3 do not exhibit a Fibonacci ratio to each other I would expect minor wave 5 to exhibit a ratio, the only question is which one of several it will be. This is what is making target calculation so difficult.

Only a new high above 57.14 would indicate that intermediate wave (3) is over. This point is the start of minor wave 5. A new high beyond its start may not be a second wave correction within minor wave 5, and so at that point minor wave 5 would have to be over.

The channel drawn here is a best fit, and now may not be useful to show when downwards movement is over. The price point provided should be more useful.

Intermediate wave (3) down should continue to 54.05.

Summary: A third wave is underway. Corrections are brief and shallow. The new target is at 54.05. Only a clear breach of the pink channel on the daily chart would indicate that the downwards trend is being interrupted by an upwards correction.

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The bigger picture sees US Oil in a super cycle second wave correction unfolding as a huge zigzag. Within the zigzag cycle wave a subdivides best as a five, indicating a zigzag, and cycle wave b is a complete double zigzag.

Within intermediate wave (3) no second wave correction may move beyond the start of its first wave above 107.67.

Cycle wave c is most likely to end when price finds support at the lower edge of the large channel.

Within cycle wave c intermediate wave (3) would reach 2.618 the length of intermediate wave (1) at 54.05.

Intermediate wave (3) has now moved far enough beyond the end of intermediate wave (1) to move the invalidation point down. Intermediate wave (4) to come may not move back into intermediate wave (1) price territory above 91.76.

Minor wave 3 is not over, and minor wave 4 to follow it should be brief and shallow. Along the way down to the target for intermediate wave (3) to end I now expect a continuation of strong downwards movement with shallow and brief corrections interrupting it. The pink channel is a best fit channel: draw the first trend line from the lows labelled minute waves i to iii, then place a parallel copy on the high labelled subminuette wave ii. This channel is nicely showing where upwards movement is finding resistance. The channel is being breached to the downside by a strong fifth wave, typical of commodities.

Only when this channel is breached by upward movement would I expect that the downwards trend is over for the mid term. At that stage I would expect that intermediate wave (3) would be over and intermediate wave (4) would have begun.

The target at 84.65 was comfortably passed and the structure is incomplete.

Summary: The new target for this wave to end is 79.67 – 78.15, which may be met within one to two weeks.

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The bigger picture sees US Oil in a super cycle second wave correction unfolding as a huge zigzag. Within the zigzag cycle wave a subdivides best as a five, indicating a zigzag, and cycle wave b is a complete double zigzag.

If cycle wave b were to continue any higher it may not move beyond the start of cycle wave a above 146.73.

Cycle wave c is most likely to end when price finds support at the lower edge of the large channel.

Within cycle wave c intermediate wave (3) would reach 2.618 the length of intermediate wave (1) at 53.92.

Depending on the length of this third wave I may consider moving the labeling within cycle wave c all up one degree.

Intermediate wave (1) down looks like a five wave impulse and intermediate wave (2) upwards looks like a clearly contrasting correction with a lot of choppy overlapping movement.

Within intermediate wave (3) minor wave 1 is close to completion. When it is done I will draw a Fibonacci retracement along its length and expect minor wave 2 to end about the 0.382 Fibonacci ratio in the first instance, and the 0.618 Fibonacci ratio slightly less likely. Because this would be a second wave correction within a third wave it may be more shallow and brief than otherwise.

Minor wave 2 may not move beyond the start of minor wave 1 above 107.54.

Minor wave 1 is ending with a typically strong fifth wave.

Within minor wave 1 minute wave iii is 0.52 short of 6.854 the length of minute wave i. At 78.15 minute wave v would reach equality in length with minute wave iii.

Within minute wave v there is no Fibonacci ratio between minuette waves (iii) and (i). I would expect to see a Fibonacci ratio between minuette wave (v) to either of (i) or (iii). At 79.67 minuette wave (v) would reach equality in length with minuette wave (i).

I favour the upper end of this target zone because it is calculated at a lower degree.

Draw a channel about minute wave v using Elliott’s first technique: draw the first trend line from the lows of minuette waves (i) to (iii), then place a parallel copy on the high of minuette wave (ii). I would expect minuette wave (v) to find support and end at the lower edge of this channel.

When this green channel is breached by at least one full daily candlestick above it and not touching the upper green trend line then I would take that as trend channel confirmation that minor wave 1 is over and minor wave 2 is underway.

Minor wave 2 may not move beyond the start of minor wave 1 above 107.67.

Downwards movement has continued as expected. The wave count remains the same.

Summary: The target remains at 74.53. This target may be 13 weeks away.

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Upwards movement has hit the upper teal trend line. Since price bounced down from that trend line this provides some confidence in this main wave count.

The one thing which looks most certain in this wave count is cycle wave a downwards is a five wave impulse. This means cycle wave b may not move beyond the start of cycle wave a above 146.73. Cycle wave b should subdivide as a three wave structure and is labeled as a double zigzag, which should now be complete.

Within the double zigzag this wave count sees primary wave X as a regular contracting triangle, ending at 84.07 where intermediate wave (E) typically undershot the B-D trend line.

It looks like the first five down within intermediate wave (3) is complete.

Ratios within minor wave 1 are: there is no Fibonacci ratio between minute waves iii and i, and minute wave v is 0.67 longer than 2.618 the length of minute wave i.

Within minor wave 1 minute wave ii is a deep 92% regular flat correction and minute wave iv is a more shallow 58% zigzag showing good alternation.

I have drawn a parallel channel about minor wave 1 using Elliott’s second technique: draw the first trend line from the ends of minute waves ii to iv, then place a parallel copy on the end of minute wave iii. When this pink channel is clearly breached by upwards movement that shall provide trend channel confirmation that minor wave 1 is over and minor wave 2 is underway.

At this early stage minor wave 2 is unconfirmed.

If minor wave 2 has begun here then it may end about the 0.618 Fibonacci ratio of minor wave 1 at 103.28.

Minor wave 2 may not move beyond the start of minor wave 1 above 107.67.

The target for intermediate wave (3) remains at 74.53 where it would reach 1.618 the length of intermediate wave (1). Intermediate wave (1) lasted 13 weeks and intermediate wave (2) lasted 28 weeks. I would expect intermediate wave (3) may last a Fibonacci 21 weeks. So far it is in its 8th week so it may continue for another 13 weeks.

Movement below 104.51 confirmed the main wave count and invalidated the alternate wave count. The trend is down at cycle degree.

Summary: The target remains at 74.53 and this target may be still a few weeks away. A short term target is at 98.90 and may be met in about one or two weeks.

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Upwards movement has hit the upper teal trend line. Since price bounced down from that trend line this provides some confidence in this main wave count.

The one thing which looks most certain in this wave count is cycle wave a downwards is a five wave impulse. This means cycle wave b may not move beyond the start of cycle wave a above 146.73. Cycle wave b should subdivide as a three wave structure. It looks like a double zigzag which should now be complete.

Within the double zigzag this wave count sees primary wave X as a regular contracting triangle, ending at 84.07 where intermediate wave (E) typically undershot the B-D trend line.

Within cycle wave c primary wave 1 is incomplete.

Within primary wave 1 intermediate waves (1) and (2) are complete. Intermediate wave (2) is a double combination: expanded flat – X (triangle) – zigzag.

At 74.53 intermediate wave (3) would reach 1.618 the length of intermediate wave (1). Intermediate wave (3) may only subdivide as a simple impulse.

Within intermediate wave (3) minor wave 4 may not move into minor wave 1 price territory above 105.11.

I am not certain that my labeling of minor wave 1 is correct, but this movement does not subdivide as an impulse. It may be an atypical leading diagonal.

At 98.90 minor wave 3 would reach 4.236 the length of minor wave 1. This target may be too high however. It expects that minor wave 5 should be a long extension, and this may not be the case. Minor wave 3 may turn out to end lower and may be the longest extended wave down.

Within minute wave iii minuette wave (iii) is 0.41 short of 4.236 the length of minuette wave (i).

Ratios within minuette wave (iii) are: subminuette wave iii is just 0.12 short of 0.618 the length of subminuette wave i, and subminuette wave v has no Fibonacci ratio to either of subminuette waves i or iii. Subminuette wave iii shows the strongest downwards momentum within minuette wave (iii).

Ratios within subminuette wave i are: there is no Fibonacci ratio between micro waves 3 and 1, and micro wave 5 is just 0.16 longer than 1.618 the length of micro wave 1.

I have used Elliott’s first technique to draw a parallel channel about minute wave iii. Draw the first trend line from the ends of minuette waves (i) to (iii), then place a parallel copy on the end of minuette wave (ii). I would expect minuette wave (iv) to be very likely to remain contained within this channel.

Minuette wave (v) may end either at the lower edge of the channel, or it may overshoot the lower edge of the channel.

Minuette wave (iv) would most likely end just below the end of the fourth wave of one lesser degree at 101.18. It may not move into minuette wave (i) price territory above 105.04.

Last analysis expected downwards movement with an increase in momentum. This is not what happened. Upwards movement above 105.21 invalidated the daily wave count.

Summary: An important trend line has been touched. I expect downwards movement from this point. The long term target at 74.53 is at least three months away, probably longer.

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Main Wave Count.

I am swapping over my main and alternate wave counts for US Oil at the monthly chart level. I am doing this because upwards movement has hit the upper teal trend line. The confirmation / invalidation points are reasonably close together. We may have clarity between these two wave counts quite soon. In the meantime I would judge this main wave count to have the better overall look and so a higher probability.

The one thing which looks most certain in this wave count is cycle wave a downwards is a five wave impulse. This means cycle wave b may not move beyond the start of cycle wave a above 146.73. Cycle wave b should subdivide as a three wave structure. It looks like a double zigzag which may be complete.

Within the double zigzag this wave count sees primary wave X as a regular contracting triangle, ending at 84.07 where intermediate wave (E) typically undershot the B-D trend line. The alternate analysis sees primary wave X triangle ending later at 85.64, and this is the key difference between the two wave counts.

Within cycle wave c intermediate waves (1) and now (2) may also be complete. Intermediate wave (2) subdivides as a combination: expanded flat – triangle for X – zigzag.

At 74.53 intermediate wave (3) would reach 1.618 the length of intermediate wave (1). It should last at least the same duration as intermediate wave (1) which was three months, but most likely it would be substantially longer. It may last about six months or so.

Divergence between price and MACD during the end of intermediate wave (2) supports this wave count.

Movement below 104.51 at this stage would invalidate the alternate wave count below and confirm this main wave count.

Alternate Wave Count.

This alternate wave count sees the triangle for primary wave X ending later, and at that point the structure for the triangle actually has a much better look than the main wave count.

This wave count expects some more upwards movement before cycle wave b is complete.

Cycle wave b is still seen as a double zigzag, and the second zigzag for primary wave Y is incomplete. Only intermediate wave (C) needs to complete.

Within intermediate wave (C) minor waves 1 and now 2 are complete. Minor wave 2 ended with a truncated C wave.

At 112.73 minor wave 3 would reach equality in length with minor wave 1.

At 110.86 minute wave v would reach equality in length with minute wave i.

Minor wave 3 has not shown an increase in upwards momentum beyond that seen for minor wave 1. This reduces the probability of this wave count to an alternate.

Within minor wave 3 minute wave iv may not move into minute wave i price territory below 104.51.

At 117.84 intermediate wave (C) would reach equality in length with intermediate wave (A).

Last analysis expected downwards movement with an increase in momentum. This is not what happened. Upwards movement above 104.49 invalidated the daily wave count.

I have a new wave count. A variation of prior analysis is an alternate wave count.

Summary: Price should move lower to a target at 97.04. The invalidation point is at 105.21.

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Main Wave Count.

The one thing which looks most certain in this wave count is cycle wave a downwards is a five wave impulse. This means cycle wave b may not move beyond the start of cycle wave a above 146.73. Cycle wave b should subdivide as a three wave structure. It looks like a double zigzag which would be incomplete.

Within the double zigzag this wave count sees primary wave X as a regular contracting triangle, ending at 85.64 where intermediate wave (E) typically undershot the B-D trend line. The alternate analysis sees primary wave X triangle ending earlier at 84.07, and this is the key difference between the two wave counts.

Within primary wave Y intermediate wave (C) is incomplete. It would most likely move at least a little above the end of intermediate wave (A) at 112.24 to avoid a truncation.

The daily chart shows the structures of intermediate waves (B) and (C) within the second zigzag of primary wave Y.

Intermediate wave (C) may subdivide as either an impulse or ending diagonal. It looks so far more like an impulse.

Within the impulse minor wave 2 is an incomplete zigzag. This part of the wave count sees minute wave a downwards within minor wave 2 as a five wave impulse. If this is correct then minute wave b may not move beyond the start of minute wave a at 105.21.

At 97.04 minute wave c would reach equality with minute wave a.

Minor wave 2 may not move beyond the start of minor wave 1 below 91.24.

Thereafter, this wave count would expect a third wave upwards.

At 118.36 intermediate wave (C) would reach equality in length with intermediate wave (A).

Movement above 112.24 (after minor wave 2 is complete) would provide confirmation of this wave count. At that stage the alternate below would be invalidated.

Movement above 105.21 would invalidate both wave counts at this stage. If this happens then my analysis of minute wave a downwards as a five wave structure is wrong. This would indicate minor wave 2 would be over and a strong third wave upwards would be underway. I would expect any invalidation above 105.21 to be followed by significant further strong upwards movement.

Alternate Wave Count.

This wave count follows on directly from last analysis.

Cycle wave b is here seen as complete. Within it primary wave X is a regular contracting triangle ending a bit earlier. This does not have as clean a fit as the main wave count.

Cycle wave c downwards would have begun.

Within cycle wave c minor waves 1 and 2 would be complete. A base channel drawn about them is breached by upwards movement and this reduces the probability of this wave count.

At 84.00 minute wave iii would reach 2.618 the length of minute wave i.

At 72.53 minor wave 3 would reach 1.618 the length of minor wave 1.

This wave count requires an imminent strong increase in downwards momentum as the middle of a third wave begins. This now looks unlikely.

Minute wave ii (if it were to continue higher) may not move beyond the start of minute wave i above 105.21.