Wednesday, March 23, 2016

Contango Flattens, Stocks Build, WTI Overbought.

All in the title. And Fibonacci targets reached. WTI, it was nice while it lasted.

Contango flattens.
(from last week)

Stocks build.                                                                
                                           (current)                                         
click to enlarge
WTI overbought.

May contract
click to enlarge
Note the Negative divergence on  RSI. 
Nearby

And Fibonacci targets have been reached.
 BTW not only was there a .618 retrace of the move down as shown above BUT the nearby month rallied 62% from 26.05 

Going way out on a limb....could be a little downside risk here. 

Please note that new contract lows in May or June can be made while only giving the nearby month charts a deep pullback, not uncommon in 2 wave's and major pivots.
 In fact, the May contract rally has an "abc" corrective look, with the c =1.65 of the a. See above.

With Rbob in a similar chart situation and margins narrow, I would expect less severe a pullback, preserving the gap on the nearby chart.  Result; wider margins going forward into driving season.








Thursday, March 10, 2016

The Equities Problem

From an Elliott perspective the move down from last May's high is difficult to count. Waves down that count as 5 and have the classic  "look" of an Elliott impulse wave are scarce and frankly the whole thing counts better as ABC's.  This is NOT new. Pls see OH OH Equities from Aug 12. 2015.


click to enlarge
The c wave is very very close to equal to the a wave. (sorry about typos)
And the recent thrust up is hitting the .618 retrace.

Important question presents; is this an X wave up to be followed by another series of abc's down or the first leg up of a new high for world markets? I'm betting on the former.
Should find out pretty damn soon.

Wednesday, March 9, 2016

Crude Runs Out of Gas?

WTI hit important Fibonacci retrace resistance at the highs yesterday. The rally of $12 represents a 46% gain in 5 days! A little consolidation would be expected. Please note previous posts re targets etc.
This is from my twitter feed dated Feb 12;

click to enlarge

If that's hard to read that 50% retrace target from Feb 12 was 38.39 .

Additionally the April contract vs the near hit a .38 retrace.
 The April can be counted as having an abc corrective structure with the c = 1.618 of the a.

All in all the highs yesterday represent important Elliott wave resistance and probably should be seen as medium term significance.

Short term if it can hold 34.50 or even better 35.50 and take out the highs the mid 40's will be in reach.

Longer term the low measured target WAS $25.80.