Tuesday, August 22, 2017

WTI and Fibonacci

When I first started employing Fibonacci ratios to analyze markets, in 1984 (thanks Walter Z), most oil industry professionals were, lets just say, more than skeptical. Forget Elliott Wave Theory.

Take a gander at the WTI spot month charts below and the Fib retrace points.

5 Yr.
click to enlarge


1 Yr.
click to enlarge


1 Mo.
 click to enlarge


And On the Upside?

5 Yr.
click to enlarge
Not a powerful example; the move up from the lows cannot make a .382 Fib retrace.

5 Yr. #2
click to enlarge
The move up off the lows ran into resistance at Fib .786 of the last leg down, suggesting a structural relationship not seen on the preceding chart.


1 Yr.
click to enlarge

1 Mo.
click to enlarge

Again the above is not a great example.
However in the following chart, the retrace is closer to a Fib .618 

1 Mo. #2
click to enlarge

Might encourage keeping an open mind as to exactly what the unfolding wave count will be and the expectations for subsequent legs.


The risk of trading futures and options can be substantial. Trading foreign exchange and energy derivatives carry a high degree of risk, and may not be suitable for all investors. 
The above is merely an abstract theoretical discussion mostly for my own entertainment, not trading advice or a recommendation.

No comments:

Post a Comment