Analyze This

Back from my travels, and Natural Gas is done loafing too. If you don't follow me on Twittter @crudewire you're missing out on some nice pics lol. Note the pithy analysis. Anyway it's now making fresh highs, no surprise. AND it seems that the latest move down from yesterday's highs has a choppy abc quality that is characteristic of corrections.  Note the short term  50% retrace. This does look like a very possible set up for an attack on the long term 50% retrace at 4.12 . We will know if it takes out 3.87

Almost.  Even freedivers have to come up for air. Please don't get me wrong, after 35 years this looks like a long term change of trend ( please see Oct.17 post Would You Buy This?) BUT Eventually the selling is done and there is nothing left to do but ...breathe.  6 mo. chart click to enlarge Note the positive divergence on the RSI. There looks like room on the Elliott Wave count for some further lows and so the Fib retrace points above are theoretical. 3 yr.chart click to enlarge Lots of spec shorts in there now as is often the case as the 3 wave matures.

A thrust of 37% in just under a month for the Jan 17 contract, and an even more impressive 47% on the nearby contract chart, begs the question, " are we there yet?" 1 mo. chart click to enlarge Note the negative divergence on the RSI. Elliott Wave identification; the -3- of 3 is at the gap and the 50% retrace level.  This wave up is looking very well developed and mature with the current highs -3- of 5 or -5- of 5. It is likely complete or very soon will be. Not to say I"m negative on natty, just that it's overdone short and probably medium term. The natty Elliott Wave structure longer term is in abc structures that are very symmetrical.  25 yr. chart  click to enlarge Fair to say that Mt. Natural has found it's base and may very well be in the early stages of  a new abc structure up, of longer term significance. Shorter term it has measured c=a resistance at around 3.90, and 50% retrace resist around 4.10 5 yr. chart

The Euro is in deep trouble, and it looks like it's about to get deeper. 5 yr. chart click to enlarge Theoretically it could chop up to the top of it's more recent range around 116, but with US Treas collapsing and yields ripping it seems unlikely. T Note 5 yr chart A little off topic but not really; check out this long term chart of the 10 Yr.  Sure looks like a head and shoulders top.  And it's a long long way down. Anyway back to the Euro.  17 Yr Chart  click to enlarge  Interesting Fib calculations; .78 retrace of the .8245 2000 low to the high of 2008 at 1.5988 (note the actual fib numbers you can quickly guess the outcome) is .9955 And a measured C=A down from the highs with C beginning at 1.40 targets 1.00  Why do we care? German price for Reg; about $5.00 a gallon   

Sailed a 54 ft. sloop from NJ to the B.V.I. Nov.9 to Nov 27. While away my only comments were the following; and yesterday;  Pls take this opp to see the previous 3 blog posts, note date and subsequent market behavior. All the commentary there still applies and is relevant.    Nearby WTI has measured wave targets of 39 and 36; c=a and c=1.382 of a. On a more positive note; Given the importance of the 26 low, these targets are potential pivot points preceding a 3rd wave up.  

Back to the Future. My post from Oct 4, Crude; Nothing Changes if Nothing Changes   is a discussion of the range 40 to 50, hedging interest over 52 in Cal 17, and the risk of a return to the lower end of that range. Well nothing WILL change if nothing changes and OPEC is producing at top of their game for Oct.; 25.51 mbpd , up 7.2% m-o-m, led by higher Saudi and Iranian exports. # TROilResearch . Wish fulfillment 1 yr .  click to enlarge I do believe $ 26 is the low ; it sat isfies the equivalent leg Elliott measuring rule for targeting at 78%, and fundamentally probably forces re balancing in a big way. That being the case , this is possibly the last leg down in a corrective structure wave 2 or B , and will at some point be followed by a major move up that will be a 3rd wave or C wave. The 3rd wave or C wave is more often the most powerful and Fib retrace ment level s 39 and 3 6 look like potentially very important pivot points.     Shorter term the m

After a terrific run up of about 4% over the last month, the USD may be due for the pause that refreshes.  6mo. chart click to enlarge Note the negative divergence on the RSI.  After breaking to new highs and successfully back testing that area around 97.50, it is looking like a rather complete wave count on the leg up from 95.00.  1 mo. click to enlarge Backing off for a modest retrace and consolidation could be expected. Clearly the 97.50 area is important. This is likely either a complete 1st wave or  -3- of 1. In the latter scenario 97.50 the 4th of lesser degree, would likely hold followed by new highs for a -5- of 1.  I lean toward the 2nd scenario looking at the BP and Euro. A slightly higher high to complete wave 1 somewhere shy of 100.00, will also allow a more serious and lengthy wave 2 correction before the USD rips through long term resistance in a powerful wave 3.  3yr

Looking at this chart; would you be inclined to buy this? 5 yr chart click to enlarge Maybe the next chart will help. 25 yr. chart click to enlarge Maybe a related contract will further inform us.  3 yr. chart  click to enlarge 25 yr. chart Admittedly not my area of expertise BUT,  this is all that matters now for every market really, and it is NOT encouraging. Will the Fed raise rates? Does it matter?

USD exceeded the previous July high of  97.61 yesterday. Last Thur it took out  96.50, a point previously mentioned as confirming a significant new structure to the upside. Pls see the Aug. 31 post USD Time? click to enlarge A discussion of the lengthy sideways consolidation, it's possible wave structure, and why it is over, can be found on the hyperlink above. I encourage taking a look at it. The risk that a new, trending, primary wave up, is now beginning, has increased significantly. (Please note that shorter term the RSI is looking pretty elevated. )  Targets for a Primary 5th Wave  25 Year USD chart  click to enlarge The Elliott 5th wave measuring rules is that it will very likely exceed the termination of the 3rd wave, it will have a .618 Fibonacci relationship to the preceding structure or equal the 1st wave. 5= 1 @ 112.71 5= 1 thru 3 x .618 @ 112.34 5= .618 of 3 @ 107.51 In the meantime a pullback to test the breakout at 97.61 would cer

Could Be DB. 1 month Obviously a break either way at this point will signal next major leg. Unless it's a false "throw over" followed by a rip in the other direction. Seen that many many times actually. The SP has already taken out that support trendline at about 2143. In my mind the 2134 level which was the 2015 high needs to be taken out on the downside to be confirming a new leg down.

WTI has been trading between 40 and 50 for the last 6 months, a range roughly 11% either side of 45. As there really hasn't been much in the way of new information, merely old  information spun up a little differently, it's no surprise the same old numbers are repeatedly appearing before us. 6 mo. click to enlarge One of the key factors no doubt is hedging next years production, and as I write this, WTI cal 17 is just over 52 with CLX at 4860 . That level and slightly higher, has seen active hedging interest in the past. Taking out the highs would suggest something WAS changing, but until that happens, the risk is greater of a return to the lower end of the range.  Extraneous factors; USD strength, election tightening prior to Nov.8, consumer strength, DB, weather?

The INDU appears to be leading in terms of  pattern development on the charts. At least it's weaker. click to enlarge The Fib .618 retrace at 18033 is a critical hold for bulls, and an overlap targets at a minimum, the lows of the range at 17822. Generally the comments from the last post Sept 13 hold, "The above bounce is likely a 2 wave which is often a deep retrace of the 1st wave, it could well have another leg up, for an abc structure (or not). Risk of an accelerating move down is high in this scenario, and extreme care should be taken. If an Elliott Wave 5th wave of primary cycle degree is complete, even a normally modest .382 retrace will be dramatic." In Dow terms that's around 14000.

The precipitous fall Friday was clearly the beginning of something as opposed to the end of something, ie a correction down. This is the most important factor at the moment for Elliott Wave analysis. It will color the interpretation of developing sub waves and their implications going forward. Why was it clearly the beginning of something ? Volume Friday in the SP was about 50% higher than it has been running, and breadth was heavily broad. Additionally it decisively took out all the previous lows over the last 2 months.  This followed a month of weak attempts at new highs capped off by the Thursday Sept 8 Key Reversal Day (including overnight trading); a higher high, lower low, and lower settle. click to enlarge Note the repeated RSI negative divergence. All the above paint a picture of an exhausted up move, and a hot move down. It is very very seldom that an initial impulse wave in either direction is NOT followed by AT LEAST  one more significant wave of Fibonacci r

Haven't weighed in on NG in over 18 mo.s on this blog...it's just been too far down for too long BUT..  I love it! It's consolidated in an abc pattern (sorry can't add text on chart) in a relatively shallow retrace of preceding leg and is heading back up. If it can start to make new highs it may well be confirming the beginning of a very long term structure to the upside.  click to enlarge Time to buy some wells. Just an expression. Futures and options trading is only suitable for professionals and the truly deranged.

WTI  Cracks that whip   once again as hedgies battle hedgers.  The spike up spurred on by yesterday's inventories, is only the most recent in a series of sharp reversals seen over the last year, albeit of lesser range. This is more evident in the chart of the contract rather than the nearby continuation chart. This suggests a market testing direction and is not uncommon at turning points.  1 year  click to enlarge The legs back and forth do appear to be structured in " abc"s, characteristic of consolidations/ corrections. Most likely the WTI wave structure is in the middle of this, and will take more time prior to clarity, however these swings should start stretching out as it resolves.   1 month As stated in the preceding post, risk is somewhat greater medium term to the downside in this set up, 40 before 50.  NOT recommending anything except go sailing! 

The move lower today has taken out some telling Elliott Wave points, signaling medium term weakness and bolstering the case for limited upside risk. Specifically the Fibonacci .62 retrace of the last leg up provided only brief support yesterday afternoon and there has been an important overlap of a previous high.  1 month chart click to enlarge   That overlap negates the possibility of this pullback being a corrective 4th wave to be followed by a 5th wave to new highs.  In the current structure the risk is much higher now that the move up to 49.36 was part of a larger corrective structure and counter trend medium term. Testing the 40 low and even exceeding it are now definite possibilities.    1 yr chart  click to enlarge Very short term bounces can be expected of course. Here the Fib .382 is sitting on the 4th wave of lesser degree and that 50% retrace point really looks like an area that can be revisited. No trading ad

The USD is smack in the middle of its long standing range at 96.24. The big question is whether it will get into the upper half of that range and start to challenge some of the previous highs and signal longer term strength. 3 yr chart click to enlarge At this point the sideways structure IS on the mature side at 17 months. Sideways moves have only exceeded this once, 2012 to 2014, which lasted 23 months.  Additionally it is possible to identify a double abc structure potentially completed.  3 yr chart click to enlarge In the first series of abc above, the c =.78 of a. in the next abc series the c = .62 of b and b =.62 of a 6 mo chart click to enlarge And as you can see below once again USD is challenging the .62 retrace point of the previous leg, in this case the c from the second series. At the moment then there are a number of resistance  points clustered just overhead; the median of the range at 96.24, the .618 retrace at 96.28, and the

When it comes to excitement WTI pretty much wins. Between geopolitics, currency sensitivity, refinery economics, seasonality, and consumer behavior you're talkin never a dull minute. Recent spec short covering by hedge funds, ignited by freeze talk and USD weakness is finally meeting producer hedging with Q 17 hitting 53 Friday. John Kemp at Reuters reports, " Hedge funds had established a record short position of 220 million barrels in NYMEX WTI by Aug. 9, but this was followed by a record one-week 54 million barrel reduction in short positions by Aug. 16."   So right now it's the Hedge Funds vs. the Hedgers and it s not at all clear who s going to be triumphant (Que Olympic theme) Bulls want to see 48.55 taken out, the 50 % retrace and overlap of a previous low. Bears want to see 46.46 penetrated.

Critical to so much else in the market the good ole USD is looking particularly stable and directionless longer term, slightly weaker medium and shorter term. The above 5 year chart reveals only 6 months spent in a trend, unless sideways can be considered a trend. More recently the USD can be described as nearing the bottom of it's range, with support yet to be proven certainly. I can find Fibonacci relationships between the swings within the range, but frankly, all that is subject to revision in a structure like this, until it is pretty definatively complete. 6 Mo click to enlarge The move up over the last 2 days will have to break 95 for starters, with 96.50 looking a lot more convincing. Very short term it has to hold 94.42