Tuesday, October 25, 2011

Crude Oil Rip

The Crude's big rip, as per the prior two crude posts,  Crude Oil Update
and Crude Oil Targets, supports the alternate count; an abc structuring of the longer term move down, and this rip up is likely an X wave, that has reached significant resistance.

 Active Mo. Daily
 click to enlarge
The 50% retrace of the entire move down, at the morning highs, if proven as a pivot,  supports the interpretation of the move up as an X wave and the move down as an abc structure, as labeled,  rather than 5 wave. That interpretation implies another series of abc's down, most likely two more, at least.

Hourly
 click to enlarge
Note the RSI negative divergence, and extended overbought run.
The bulls want a 5 wave count up, and therefore do NOT want to see more than a .618 retrace of the above 5 structure, or 89.79.
Unfortunately for the bears, the down move, whether C wave, or b of B, ain't gonna be easy, as we've seen.

Could the move down over the summer have been it for a correction in a continuing B wave up?
Anything is possible BUT the relatively short time, 6 mo. vs 29 mo.s, the importance of the top at 114 for Crude, and 1373 for the SP argue against it. The bounce off the 50% retrace of the 32.40 to 114 move argues for it.




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