Jul 012012

On 25 June 2012, when Crude Oil was trading around $79, I wrote on Forbes that Crude oil still has another 10% downside. And on the next day, when Brent Crude was near $92, I said the same thing – that it has another 10% to go – on the DOWNSIDE, that is. Guess what! Crude went from $77.28 to $85.34, a move of 10% UP, and Brent Crude went from $91.73 to $98.28 all in one day.Wow! What happened there?

Now I do have a track record of occasionally getting things really wrong, but this takes the crown. Or does it? Should we write off the bears? Suppose I say that we will still see Crude down to near the targets mentioned earlier, I will be unnecessarily shooting myself in the foot. But just as I gave you technical reasons for my earlier calls, I wish to give you a couple of charts and you can make up your own mind.

Dec 122011

Crude Oil charts are showing tentative signs of fatigue after the run up from $74.95 to $103.37, a move of almost 38%. I am anticipating a correction back to around the $91 levels, but we need to be patient as there will likely be one more attempt higher first. Crude Oil traders need to keep a close watch going forward to see if we first get a dip to around $97 followed by a move back towards $103. If we get these moves, then the time to sell will be on any dip under $100 AFTER reaching 103. Your stops can then be placed above the high seen. This way you will be able to get an attractive risk-reward for the trade.

Elliott wave comments are given on the two charts you see here. As always, every update you see in WaveTimes is an opportunity to learn and reinforce your understanding the Elliott Wave Principle.

Nov 022011

Elliott Wave Analysis works very nicely in commodities. There is a lot of money to be made if you can apply the techniques you learnt in Five Waves to Financial Freedom. Trouble is, even if you learn the methods, you need to have the capital and the stomach to pull the trigger at the right time, and more importantly, to stay with the trade until your sensible stops are done or your profit levels are reached. This is a challenge that ranks at par with being good at analysng the markets.

Now without any further ado, let me present you with your favorite charts! Enjoy!

By the way, I am off on an exotic holiday to Cambodia tomorrow.
Best of luck in the meantime, and if the Forum goes live, you may start sharing your thoughts and ideas with other members right away.

Sep 082011

A lot can happen in three weeks! In the Elliott Wave Analysis of Crude Oil posted on 15th August, we anticipated that the price will rise to around 88.10-89.50 and then decline. We had the $71 level in mind, (quite greedily I would say because Oil did come pretty close to achieving that target earlier on, reaching below 76).
This time, though, the sell off stopped at 79.17, still a decent 11% down from where it had topped.

The recovery from 79.17 sent out all kinds of clues to the Elliott Wave trader, (these have been discussed in detail in my book “Five Waves to Financial Freedom”)

The key question now is what should we do here? My suggestion is you should stay on the sidelines. If we get to the mid 94 levels, post me a note on WaveTimes and I will look at the chart again. Will we get there? I am not able to say that at this point in time.

Aug 152011

Hello folks, It has been a busy few weeks as I was spending all my evenings putting together my book. Almost done, now! Between, I noticed that Crude Oil came quite close to the target of $71. Remember we have been bearish on this from the time it was around 110? (when some leading investment banks were calling it to $150).

The outlook for Crude Oil in the near term is for a failure between 88.10 and 89.50 and come down once again. Hopefully, this time we will reach the target of 71 levels. Stops should be placed on two closes above 89.80 Take a look at the attached chart and stay tuned for the announcement regarding the book!

Jun 212011

I would like to share with you some charts that demonstrate how to use Elliott Wave Analysis in the real world.

The first chart, dated June 9, (when Crude oil was at 101.18) shows a large triangle. As you know, I have remained faithful to the bearish outlook throughout the recent weeks, even in the face of bullish calls from other analysts. This in itself is an important lesson for some. It is essential to stick to one count until proved wrong, or until fresh clues emerge.

In the second chart I have redrawn the triangle (and called it Wave B). The sell off that started from point B has already completed 3 steps. If this is a C wave, we should see it complete the 4th wave around 95.10-45 and come off as a fifth wave. We would also look for the 5th wave to extend. However, if we see it trade above 96.10, then we will use any dip thereafter to exit shorts and wait for better levels to reinstate.

May 262011

On 15th May, I prepared the first chart for a friend of mine in the Far East. The important point to note is this was done before Goldman Sachs came out with a bullish call on Oil. The set-up was right, and the moment that news hit the market, prices started going up. This is the way things usually work. There will be a catalyst, and the move will materialize! However, once the catalyst wears off, or as fresh news comes to the fore, the old fundamentals will reassert themselves. The only tool we have is Elliott Wave Principle. Our count says Oil will go lower, once this correction is finished. We should stick with the original view until the count is proved wrong (by the violation of one or more rules of the Wave Principle, or by some guideline going out of sync with the developing patterns).

I have said that we are in a correction. As you can see from the scond chart, this correction is turning out to be a complex one, ie one where there are combinations of smaller patterns. Complex corrections are notoriously unpredictable because they take all shapes and travel distances that we cant anticipate. Yet, I have given one possible version here. What is more important for most traders is the bigger direction, Is it down, or is it up? I still think we go lower. Let us see.

May 252011

You have all heard the news.

Commodities rebounded from the biggest drop in almost two weeks after Goldman Sachs Group Inc. advised investors to return to raw materials….When Goldman Sachs analysts made their call yesterday, many commodities traders must have felt either relieved or angry. Relieved if they were long already, and angered if they were short. That is the long and short of it!

Why should anyone who was bearish feel angry? Perhaps it is because of what “naked capitalism” discusses in the post “Goldman Recants its $200 a barrel, ‘Super Spike’ call for oil”? But you would surely want to read ‘The Reformed Broker’ who noticed that Goldman made quite a contradictory call the same day!

While you are mulling about all this, perhaps a bit of advice from Peter Brandt would help. Peter has written a book titled “Diary of a Professional Commodity Trader”, and David Blair a.k.a The Crosshairs Trader has provided us with a quick excerpt…actually six major points. Enjoy!