Friday, November 4, 2011

Crude Oil Elliott Update

Not much has changed on the Elliott count since the Oct 25 post , Crude Oil Rip
despite the avalanche of news. There has been a slight extension of the X wave structure, by 9 cents.
Bottom line, downside risk is extremely high from here, whether this move down turns out to be the C wave, or b of B, and these levels in the low 90's represent a gift.
 Active Mo. Daily
click to enlarge
Note the negative divergence on the 14 RSI.
The X wave retraces 50% of the entire move down and the X wave can be seen as being structured
as an abc with c=a.

Most likely the recent X wave is of a higher degree than the preceding x wave and subsequently another 2 series of abc's wouldn't be a surprise.
Unfortunately for the bears, the down move, whether C wave, or b of B, ain't gonna be easy, as we've seen.On the downside if that turned out to be the structure, it would equal the first 2 series of abc's, from 114.83 to 74.95, at 55.05.
Longer term however targets for a C wave should have some significant Fibonacci relationship to the A down, as below;

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 C= .50 of A at 57 ( though that would represent an extremely truncated C wave)
Note the 55 target discussed above.

The extreme correlation between markets also suggests extreme downside risk ...











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