Wednesday, January 16, 2019

WTI Update- a 4 Handle Future?

From my last post Dec 28, "Before we get into next year, short term the WTI has a good deal of upside risk to between $48 and $54, with $51.50 being my favorite cluster of resistance/ and a measured target for a 4th wave."

Hourly
click to enlarge
As can be seen, WTI is in the high side of that range and evidencing some recent weakness.
It does have a "look" that could produce a higher high at the top end of the range there, or even somewhat higher.  However the greater risk, short and medium term is to the downside from here. 
It may turn out that a "b" wave chop down is in the cards with a subsequent "c" wave up,  but that kind of move can be deep and retest the lows .
See above Fib retracements, particularly the .618 and .78 


Longer Term Risk For Bulls AND Bears

The Decline
click to enlarge

While the labeling of the subwaves above can be argued,  including whether the wave down is completed yet or not,  the $34 thrust down is probably NOT a completed correction.
At least one more wave down can be looked for, of similar degree, even in a "correction".  Even if this bounce carries as high as say $65.
However.

The Elliott count above is a not quite complete impulse wave down. So longer term likely more to go with lots of 4 handle time.  

Of course in Elliott Wave there is always an ALT possibility. 
Have fun.








Wednesday, January 2, 2019

Will It Hold? Elliott Wave Outlook 2019 and Beyond

Time to examine the likely structure of the SP500 move down and it's long term implications.

10 yr. Weekly 
click to enlarge

 I usually write assuming a pretty passable familiarity with the basics of Elliott Wave Theory on the part of my readers. A summary, including both pros and cons, can be found here.
 A post discussing the entire long term move up, it's structure, and why it had many features of a completed move, can be found in my Sept. 24 post Top of the Pops; Ring Ring for context.

Keeping it simple- the 20% pull back, coupled with that 10 yr. trend line is providing support...for now.  I do believe we are currently in a 3rd wave down, which is where you would expect to be in the count, to take out that trend line.
I have to say that labeling the sub waves down from Dec 12 to 24 is VERY difficult and suggest to me that they are a series of 1, 2 's in there and the -3- of 3 is still in front of us.

2 Yr
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Why It's Not Just a Corrective Pullback

The Christmas Collapse took out the lows for the year, the .382 retrace,  and the .50 retrace of the (5) of 5 of V of the GSC. That deep and powerful move is NOT a correction to the last 2 years' move up; if it were, it should have held at the 2530 mark.  At best it MAY BE a correction to the next larger degree, the 5th wave beginning Mar 2009. 

10yr.
click to enlarge

The 4th wave of the next larger degree (4) carries all the way down to 1800 ALSO coincidentally a 50% retrace of that 5th Wave. 
So A very bullish minor correction would  retrace into the range of the (4) wave at a bare minimum 2000 at the .382 retrace, or down to the 1800 level mentioned previously. 

However it would be remiss, especially under the circumstances, to leave the impression that a pullback to 2000 or 1800 is the high probability outcome suggested by Elliott Wave Theory.

The Beginning of the End

The high of a Grand Super Cycle is thought to be reflecting and accompanying a "civilization peak". The ensuing reversal could be expected to last decades if not longer, and be marked by reversals in civil functioning, societal cohesion, global trade, law and order. In short the reversal of the last  cycles' progress. 

 IS THAT what we are starting to see?



I would argue absolutely yes; in fact in many capitals including our own, the term "globalism" is being used as a pejorative. We are rolling back the previous decades rules and regulations, and dismantling civic agencies and institutions like the State Dept. and EPA. Our President AND his supporters, are attacking our Allies, the FBI , the "deep state", and the Fed. These are the structures that accompanied and supported the ascent of our civilization and our leadership of western democratic capitalism.
These reversals of the progress of the last 50 yr.s are exactly what you would expect to see in a Grand Super Cycle correction.

And so as evidence piles up that we are beginning that multi decade slide downwards, it would be shortsighted to look for a bottom on the SP around 2000 or 1800. While one or both probably will provide short or medium term bounces, the most likely outcome in the end, would be that eventually markets will cease to function as the institutions that support them collapse. 
We probably have some time before that but... collapse is quick.

The last 4th wave of lesser degree (2 lesser), took from 2000 to 2009 and was a .61 Fib retrace at the lows of 666. You will recall that all our major Financial Institutions were collapsing or about to collapse at those lows. I would not hold financial assets, even shorts, until the lows. The 2000 A wave collapse took 2 years, the 2008 C wave collapse had most of the damage done in 1 year. 

A .618 pullback from the highs puts the SP at 1127. 
A .78 pullback targets 649

The 4th wave low of 2 lesser degrees is 666.

 Elliott , fractals, etc are easily misinterpreted and miscounted. The dim past and it's sketchy data are not reliable. Hopefully the Grand Super Cycle is yet to be completed and we'll all be re labeling everything in 2020. 
















































Friday, December 28, 2018

WTI Elliott Wave Outlook 2019 and Beyond

Before we get into next year, short term the WTI has a good deal of upside risk to between $48 and $54, with $51.50 being my favorite cluster of resistance/ and a measured target for a 4th wave.


Hourly
click to enlarge
A leg up from todays low equal to the first leg up, targets 49, also the .618 retrace.

Daily
Click to enlarge
This chart is updated with my Elliott count, excuse my idiosyncratic labeling.

You will see that the range of the 4th wave of a lesser degree target is encompassed by the gray box.
That range might be expected to be reached according to Elliott,.

If the count above is correct, than another low is yet to be put in to complete a 5 wave count down impulse wave I or A.
Targeting rules for a 5th wave are either that it will be equal to the 1st wave or .618 of waves 1 thru 3.
Diagonal triangle 5th rules do not come into play here, at least at this degree and at this time.

The initial wave 1 down off the highs was truncated and is not usable here, leaving us with the .618 measure.
If the 4th wave were to carry as high as 54.50, the top of the potential range, than a 5th wave measured target hits at 33.12
If the 4th wave were to carry to 51.50, the middle of the potential range, than a 5th wave measured target hits at 30.12, etc.

So. 

This actually fits with thinking I ve had for a long time; that WTI would have to re explore the lows.

20 yr. Monthly
click to enlarge
The technical damage done thus far during the 4th Qtr. has made clear that the move up from 26.27 is over.
 WTI is now well into a new down leg that will almost certainly be related in degree, as well as by Fibonacci ratio or percent terms, to the preceding legs down. Most likely the C wave.

Possible E Wave targets

The C wave x 50% targets $32.6
The C wave x .618 targets $22.62
the C wave x .78 targets $8.36

 Happy New Year










Tuesday, December 11, 2018

Crude Oil Update...More to Go.

Time to revisit the my Elliott Wave count and it's implications.

Daily

Note the peak volume at the -3- of (3). 
There were a lot of 1,2's and as we write this only one of the sub-waves has been completed on 11/29 at 49.41
If this is the correct count, then there will be at least 2 more lower lows put in, (5) and 5, before a significant rally can develop. 
Hourly

It is still unclear whether the current consolidating structure above 50 is completed yet, but I think it has a little more to go on the upside to finish up a c for the (4) wave.
Meaning the "hour is getting late".
Weekly


Ultimately the spectre of a test of the 26.10 lows is going to be under review as lower lows are put in and the  .618 retrace of the entire move up is put to the test as support.

Addendum; the .618 retrace referred to above is actually at 45.50.
The fib retrace points were off a little in that chart.

Tuesday, November 13, 2018

The Crude Move -Where Are We Now?

This is my most likely Elliott Wave count;

Hourly
click to enlarge
Pls note the repeated pos divergence on the RSI.

The pos divergence coupled with the current count of  subwave -5-  of [3] down, suggests short term upside risk.

Daily
click to enlarge
No pos divergence yet however on the wickedly oversold daily RSI.
Note the -3- of [3] occurs as it takes out the previous lows at 64.25

Weekly

click to enlarge
On the weekly the big thing is the .38 fib retrace point of the entire move up from 26.
CL touched that yest and it is going to be an important signifier of the overall condition of the market if that holds or not and to what degree. My guess is if the wave count on the hourly chart is correct than it will be short lived support.

Don't miss the preceding Crude posts for context.

Pls don't lose any money trading on this; it's entirely speculative. Good luck btw.. 

Friday, November 2, 2018

Crude Lowdown

How low is lower? Thus far the sideways action over the last 24 hr.s does not look encouraging for the bulls. The good news is it's looking a tad oversold very short term.
Hourly
click to enlarge
Note the pos divergence on the RSI.
As I type this it dropped lower.
Daily

Note the Fib support at around the 60 point. So considering how oversold it is here perhaps a little consolidation prior to testing that 60? Jack be nimble.

For longer term view see the previous posts.

Friday, October 19, 2018

Crude Oil Update

Been awhile since I've posted on Crude Oil , but catch the Tweets of Oct.9 and 17.

Crude failed to rally off last weeks low of 70.50, and instead ranged sideways for a consolidation  before putting in new lows yesterday.  And while a $2 drop isn't all that, it suggests a wave structure down from the 76.88 high vastly different from the "abc" corrective move it well might have been prior to yesterday.

 In fact the move down could be a 5 down or even a series of 1, 2's of lesser degree, setting up for an extending 3 wave down and all that implies.
Hourly


Whats the big deal?  IMHO there is no reason in Elliott Wave theory why the Crude can't retest the low at $26.  
The initial leg up from the 33.20 low way back in 2009, ended at 114.83 or $81.63 later
This move up from the 2016 low of 26.05 prob topped out at 76.90  for $50.85, or .62 of that first move.

Weekly
click to enlarge
Note the series of neg divergence on the RSI.
So a failed retest of yesterdays breakdown at 70.50 followed by a trend line penetration, would raise the downside risk considerably here.