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.

  9 Responses to “Elliott Wave Analysis of Crude Oil”

  1. Perhaps the rising wedge pattern which has formed after the USD 76 low also hints at another sell off not being too far off.

  2. do you think the top is in place,we have ended a triple zig-zag from 76.08.

  3. i just noticed today.. there is a rising wedge as the person above just mentioned.. but that wouldn’t qualify as a elliot wave pattern.. so that wouldn’t affect your analysis in any way?

    • Hi Piyudh, thats an interesting question. Remember that whatever pattern we see is just our individual perception. The underlying is unchanged. For example, one may see a head and shoulders pattern. Another person may see an irregular 4th wave, where he considers the “head” as an irregular B wave! The interpretation is different. Both persons old be wrong if the pattern changes shape with passage of time. If I were using a certain pattern to analyze the price, all that is required is to be faithful to that interpretation till I m proved wrong. A rising wedge can coexist with another interpretation.

  4. The rising wedge can be worked in perfect harmony with EW.
    The USD 76 low was the bottom of w3 of wC, and w4 of wC has unfolded as a triple zig zag topping out just above 90 last week after which the decline most definitely looks impulsive.

  5. Recently bought you book and read the 1st Chapter, but would like to understand what websites or free tools could I use to creat the charts and where do you see oil going considering the recent Euro issues with the threat of a double dip.

    • Hello DM, Thanks for letting me know you have purchased the book. You dont need any fancy software to use EWP. Just learn the techniques, and use a simple calculator to compute retracements and projections. There is no change in my M/T view for Oil. Just go back and look for it under Commodities!

  6. An update on crude will be highly appreciated. I am struggling with my counts.
    regards,

  7. Happy Diwali Sir……

    Crude Touched 94$ – 94.5$

    As You Written In Your Post

    ( If we get to the mid 94 levels, post me a note on WaveTimes and I will look at the chart again )

    It Reaches There Sir , So I Post A Message

    ** Sir Please Suggest Whether We Go Short With Stop Loss Of Above 95$ For A Target Of 71$

    Waiting For Your Reply

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