Sunday, May 8, 2011

Crude Oil Targets

From Friday mornings post  WTI WOW
"A bounce up to the 101 area could be expected as .382 retrace. Since it's a 3 wave the 50%, at 102.85, should contain it."
So far so good; 102.38 was Fri's high and it reinforces the count outlined in WTI WOW. That implies another new low under 94.60 to get a complete 5 sub waves down for 1 of greater degree.
 click to enlarge
Again as mentioned in the preceding post, "  degree labeling can easily be change so that -1- becomes (1) etc."  an extension can occur anywhere at this point.
But generally speaking a new low for the 5 of  I of C might find support at the 50% retrace of 70.72 to 114.80, or 92.83, at the .618 retrace, or 87.55. Note the Fibonacci extensions above of  50% hits at 92.35. 
It is important to ask how much bounce from a lower number like 92.35 WTI could achieve.
Most remember that during the summer of 2008, there were relatively shallow bounces for the first 5 weeks of the move down. It wasn't until the 9th week that a 35% retrace from 90 to 110, showed up.

click to enlarge
 If the C wave down is anything like the A wave, Fridays highs may be tough to beat by much.

 Longer Term targets for the C wave;
The A wave is a 5 count down and the B wave is noticeably below the high and was a complex series of abc structures. So as unlikely as it may seem,  the most common outcome is that the C wave is  going to consist of 5 waves, and carry below the termination of A at 32.40, for a simple zig zag structure.
 The A = 114.60, so C will equal A at  23 cents. Now that seems a little unlikely ( the symmetry there is interesting though).
The A wave came off 78% from the highs, so in percent terms C= A at 25.26

The C wave =  .78 of the A  at 25.41
The C = .76 of the A at  27.70
The C= .618 of A at 43.98.
The above 43.98 = a 76% retrace of the 10 to 147 final move up in the previous structure as well.

Doing some scouting around I was unable to find ANYBODY going public with very low targets like these. All were calling for a resumption of the up move, including JP Morgan and Goldman. I saw one call for touching 90 first.

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