Monday, August 22, 2011

WTI and Brent

Active Mo. Hourly
Following a choppy, overlapping move up to 89.19, WTI has had a clear impulse wave down off the highs, "i". This has now been corrected in a clear abc pattern up for a 50% retrace, "ii".
So most likely we are seeing the beginning of the next leg down; " iii of  (5) of -3- of  3 of C" .

Active Mo. Daily
 click to enlarge

On the Daily chart the recent move up had many characteristics of a corrective counter trend move,  a rough 50 % retrace of the preceding move down that ran into trouble around the 4th of lesser degree.
Note that it DID NOT overlap the termination of  -1-  at the 89.61 low.
It may be that the low labeled (3) of -3- will turn out to be simply the -3-, but for our intermediate term purpose it is  irrelevant. Both will be followed by lower lows as 5th waves are made to complete a count down. In fact, it may well be that the 5 waves we are seeing unfold to the downside, will end up being a sub wave of the C down, rather than it's entirety.

Again for the short and intermediate term that is less critical; bounces will be followed by  lower lows.

One thing of particular note this morning has been the strength in WTI despite the Libya news (or because of it actually).
WTI less Brent
click to enlarge
Friday the spread settle was 26.23, it is currently 24.65. Obviously the explosion in Brent premium was concurrent with the Middle East disturbances and the Libyan protests that began in mid Jan.
Plenty of room for the spread to come in,  considering austerity measures and other little problems for the Eurozone.  French gasoline demand for July was reportedly down 7.5% y on y. 
The unwind can create short term WTI buying.


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