Friday, October 19, 2018

Crude Oil Update

Been awhile since I've posted on Crude Oil , but catch the Tweets of Oct.9 and 17.

Crude failed to rally off last weeks low of 70.50, and instead ranged sideways for a consolidation  before putting in new lows yesterday.  And while a $2 drop isn't all that, it suggests a wave structure down from the 76.88 high vastly different from the "abc" corrective move it well might have been prior to yesterday.

 In fact the move down could be a 5 down or even a series of 1, 2's of lesser degree, setting up for an extending 3 wave down and all that implies.

Whats the big deal?  IMHO there is no reason in Elliott Wave theory why the Crude can't retest the low at $26.  
The initial leg up from the 33.20 low way back in 2009, ended at 114.83 or $81.63 later
This move up from the 2016 low of 26.05 prob topped out at 76.90  for $50.85, or .62 of that first move.

click to enlarge
Note the series of neg divergence on the RSI.
So a failed retest of yesterdays breakdown at 70.50 followed by a trend line penetration, would raise the downside risk considerably here.  

Wednesday, October 10, 2018

Small Caps Big Pullback

It's only been a little more than a month since the Russell 2000 highs, and it's lost a lot of value since then, 7.4% as of Tue morn.
Daily Bars 
click to enlarge

It is in oversold territory, as well as hitting the Fib .382 retrace and 4th of a lesser degree support.
This suggests risk of a short term pause or bounce here. 

However given the Elliott Wave Count discussed in the previous post, medium and long term risk of a very serious nature is growing as evidenced by the deep sell off in this index.

Those familiar with Wave Theory will know the implications of a Grand Super Cycle top; a long term decline of relatively equal significance as the Cycle High lasting many decades. Since the Theory posits that markets reflect aggregate societal mood and functionality, a decline of this import would imply a society breaking down as well.
Now the GSC HAS lasted 80 years, so you may have some time before the walking dead come for you, but 
You can hear the crazies howling for blood tonight on your TV.

Happy Halloween