Friday, January 28, 2011

WTI Alternate Counts

WTI has trended down very consistently over the last 2 weeks.
 March Hourly
click to enlarge
This is the update on the Elliott count from the chart in the previous post, Crude Oil Breaks Trend.
Note the most oversold point on the RSI is  at the wave labeled -3-.  That is usually a characteristic of 3rd waves. The extension occurs in the -5-, as there wasn't one in the -3-. And -5- = -1- through -3-.
As it happens this is a very bearish count implying a 3 down is imminent, and the moment of recognition
occurring on new lows under 85.11. Downside targets for a 3  would be Fibonacci multiples of the 1, so lets say 1.6 for a target of 76.48. Frankly I think we would have to see a move down in the SP and Euro for that right now. Plus the 2 wave in the above count is shallow ( might be expected in a long overdue supercycle C wave down though).

The alternate count ;

click to enlarge
Here the extension occurs in the  -3- .
Basically this allows for a deeper retrace of the move down, into the 4th of lesser degree area, at a minimum, around 88.00, also the .382 retrace area.
A correction up would be the 2 , and they can be deep, so caution would be in order. The 50% retrace, also the break down point, at 89.06, should hold it however.

So new lows under 85.11 would of course negate the alternate count.


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