Tuesday, October 4, 2011

Crude Oil Targets

The following was first posted on May 8 , after the first sharp move down from 114.71 to 94.60 and the subsequent bounce to 102.
From Crude Oil Targets

"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."

So far there is NO reason to change the labeling of this move down. It is still most likely C of Supercycle degree, leaving all the measured targets published May 8 intact. The minimum target for a C would be 43.98

Check out the Dec 2011 chart
Note there is as yet no positive divergence on the RSI, though it is in oversold territory.
The B wave is a textbook c=a , and the C wave has overlapped the beginning of the "c of B", confirming that the move up from 57.10 is complete at 114.60.
The C= A at 29.

There is an alternative count developing as a possibility,  and that is this move down could potentially become the "b of B",  this is a  result of the spot month overlaps and frequent choppy corrections back up..However even in that scenario, there is no reason why a double bottom cannot be made at 32.40, a "flat" correction.
In the spot mo. chart
The .78 retrace of 32.40 to 114.70 is around 51
The .618 retrace of  32.40 to 114 shows up around 64.50 as does an equal leg Fib. extension.
So next big milestone on the downside is around 64.50.

Active Mo. Daily
click to enlarge
Note the repeated positive divergence on the RSI.
It is easy to count the structure down as 2 equal series of abc's.
the 50% retrace of the 32.40 to 114.70 move up is at 73.55, on the active mo. chart it comes in at 74.36.
So short term could well see a significant bounce , as an X wave, if this alternate count becomes good.

So new lows this week getting under 73.50 and the alt count recedes.
Back above 85 and it starts to look like a lead count.

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