Crude Oil Approaching BIG low …
Tag: CL #f
Crude “should” target 76-77 as a bounce target.
Thus far, the low at 44.22 has held. Yes, we had an intraday spike below but – note – it closed above 44.22 and then ripped for a nice signal reversal candle to the upside and believe we could target 76-77 w/ 60-61 as initial resistance.
why I think 44.22 is a low (for now) on crude
the case for $170 oil ….
one chart – the only thing wrong w/ this chart is the length of the data. “wish” I had longer time frame oil prices. however, based on that I put together this count.
rules:
- 2 can’t go below the origin of 1: check.
- 3 can’t be the shortest: check
- 4 can’t go below 1: check
thesis, this move in oil is a C wave and is certainly acting like it.
why not step in and BUY at 64 OR wait for a nice pullback since, as shown below 67 might have done it. (NOTE: PRICE = TIME today for the 67 level)
What if … what if this count is correct? K A B O O M ….
Crude Oil … a potential roadmap
10/2/2014: we are at a very crucial junction w/ regards to Crude Oil. the big picture is resolving and, quite frankly, I’m not sure which BIG directional move to favor so i’m just going to TRUST the PATTERN that might have completed today. There’s an interpretation on IF the patterns works AND if the pattern doesn’t work but either way, believe we have a “line in the sand” so to speak from which to draw our conclusions and watch for confirmation in any direction. That’s why we are technicians – let PRICE and TIME be our guide.
today we have a very nice 3 drives to a bottom w/ a butterfly pattern that hit almost exactly and a rather nice INTRADAY pattern completed. we DO NOT have a DAILY signal reversal candle. that will not happen until we CLOSE above 93 on a daily basis. here’s the chart:
as you can see it didn’t go all the way into our BUY ZONE so it still “might” fail into that area but based on today’s action …. not sure the probability is in our favor. here’s the math behind the daily set-up:
w/ those patterns as our backdrop why is the area we are in “now” such a big deal? well, for those of you trained in Elliott Wave theory we are finishing the 5th wave of contracting price action. that contraction is “usually” named a triangle and can be labeled a,b,c,d,e. In the context of the BIG PICTURE this level is EXTREMELY IMPORTANT because it’s my conjecture that from this area we are either going to 1) move to new highs to ultimately attack 200 OR 2) crash and burn into the low 20’s. YUP … that’s what I’m saying and based on longer term patterns, that’s what the picture presents.
here’s the long term play for both the bulls and the bears. I will present each chart and then provide some commentary …
THE BULL CASE:
Here’s what we know:
- using LOG scale helps see the moves move clearly. this is a log scale of the crud oil monthly continuous contract
- the move from 10-149 was a clear 5 waves UP.
- the correction labeled 4 DID NOT go below 1
- 3 is not the shortest
- 2 does not go below the beginning of 1
- folks, that’s a valid count.
- now, what I don’t like is the TIME distance of the c-d leg of the triangle. it just doesn’t “look and feel” right ….
- so, on the BULLISH side of the house we have a BULLISH buy PATTERN that completed today or a little lower that represents the end of a triangle (e)
THE BEAR CASE:
Here’s what we know:
- using LOG scale helps see the moves move clearly. this is a log scale of the crud oil monthly continuous contract
- the move up from 10-49 was a clear 5 waves UP
- the primary a and b waves are 3 waves and the c wave is 5
- folks that’s a valid count
- the triangle sure looks better from a look and feel perspective ….
- for a to equal c (doesn’t have to but usually does) this move down could reach all the way down to 25/barrel.
one last, here’s a chart of the XLE / SPY. we just broke some crucial trend line support … hmmmm
wish I had longer chart data as that might help resolve the conflict on the bullish vs bearish case. right now … well, we have a pattern that has been hit or about to be hit and, well, let’s see if it works or not. I HAVE NO IDEA OR OPINION EITHER WAY … but it will help provide a road map once it resolves and that’s kind of cool, I think (?)
rock on, ok?
voo doo man out — B
10/31/2013: I enjoy this chart, not only for the amazing dynamics of the math and harmony but … I’ll tell you in a minute
here’s why – it occurred on my birthday! 🙂 July 11, 2008 was the high on crude …
anyway, I have to admit that this scenario I am putting out on the blog is, perhaps crazy, but it’s an interpretation that you can pay attention to or not … the one thing I DO NOT LIKE is that first move up from one ….it sure looks like only 3 waves and, well, that can’t be right BUT in the context of the picture it fits so I am going w/ it. the other thing is wave 4 can’t overlap the end of wave 1 and well, technically, it does go threw there for a bunch of months but NEVER closes below so I’m working w/ that one also .. subjective interpretation so to speak.
so, below are the pictures that I”m working w/ … the thesis is we have a very powerful C wave in oil down that has just begun and one that will, ultimately need to bought – perhaps 6-9 months from now … enjoy.
let’s talk Crude Oil ..
man today was a blast, hugh?
ebola, dudes attacking the white house, ISIS, Russia, Hong Kong Riots … let’s make life easy and watch the patterns!
look at this amazing BUY appearing on CRUDE ….for us pattern recognition dudes/dudettes we could care a less till 84-87 is targeted.
rock on, ok?
B
Crude approaching/at key buy pattern for support
CLIFF NOTES: a nice TIME and PRICE pattern coming in a little lower on crude for the buy. the reason this price pattern is so key is that, since the low in 2009, NO SWING LOW has been broken (shown by the blue arrows). So, it’s going to be very key for this pattern in OIL to hold as we do not want to see that trend line attacked or the swing low (roughly 91 dollars) to be taken out.
Emerging Markets and Crude …
CLIFF NOTES: note on the EEM chart below the “time” and “price” pattern that has completed for time but, perhaps, we’ll got up and see 45 as the target. This is very key as it has held the EEM back for over a year. The basic concept of polarity is shown w/ regard to the blue arrows. Now, take a look at the second chart – it’s Crude and EEM on top of each other. They have moved pretty closely together … so, now, the EEM chart get’s interesting. Our thesis is that the EEM pattern will fail – which will send Crude higher OR it will work causing a sell off in the EEM here or around 45 and therefore exert pressure on Crude Oil. Note, Crude closed at the .786 last week ..
Nothing to do, yet. But watch these levels .. .closely.
Where did that Crude Oil Support Trend Line Come From?
Cliff Notes: if your new to this blog you’ll find that it’s all based on geometry and pattern recognition. If you take a look at weekly crude it’s not hard to see that beautiful support line that’s been holding crude up since September 2009. So, when I see that I say “why” and “what’s important about that from a geometrical stand point.
1. Draw a line down from the all time high on crude into the crash low in the low 30’s. That vector is aligned in PRICE and TIME and gives rise to a natural angle.
2. Get a protractor and draw a 90 degree angle. (shown by the purple 90 degree angle shown up at the top of the all time high)
3. Now just “copy/paste” the red vector lines and create squares.
4. note the trend lines that have been “bounding” crude oil (bold red lines)
5. now, be patient and watch price as these lines are “attacked” so, no matter what the fundamentals say, we have our targets and ranges to play and add in additional tools that fit your style, techniques and fundamentals.
6. get a glass of wine or whatever fits your fancy, blow this chart up and look at gaps, consolidation you’ll find there is a lot of action …
Bart
Crude, the Loonie and Oil Services Index for 2014
the chart below shows the Oil Services Index $OSX (candles) w/ USDCAD (inverted/line) overlaid on top …
some observations:
- when the blue line (Loonie) is going down it is weak. when the blue line (Loonie) is going up it’s strong …
- at most inflection points, the $OSX and Loonie are synchronized nicely. however, for most of 2013 this relationship has diverged. in that, while one was going UP (Oil Services Index) one was going down (Loonie weak)
- the Loonie topped a good 6 months prior to the $OSX in 2007-2008. However, once they synced they got smashed …
- the 2009 bottom was well synchronized and since then they have move very nicely together.
below, we have added (black line) Crude Oil to the chart and, as expected, it is very synchronized w/ $OSX EXCEPT since September 2013. Note, the $OSX has held up, nicely. What is this $OSX?
The OSX tracks 15 large companies w/in the context of the Oil Services world …Changes in the Philadelphia Oil Service Sector Index tend to be associated with changes in the oil and gas markets, since greater exploration and construction of wells occurs when oil prices are high and less such activity is carried on when prices are lower. They were all affected by the Gulf of Mexico Oil spill …
so first let’s go thru the 15 components and look for big picture patterns – BUY or SELL.
so, as we can see, there are some nice SELL patterns coming in, there are a couple weak ones and where I didn’t post any charts there wasn’t a glaring pattern to be seen. Bottom line – I’m not seeing significant strength in the index but to elevate some of the stocks to hit their targets perhaps we’ll see some more strength. so, now we need to break down each individual component …
Crude Oil: http://bartscharts.com/2013/10/31/crude-oil-a-potential-roadmap/ this was my last post. I am still in the “look and feel” phase that the top at 147 was a 3 and the low in/around 35 was a 4. while the pattern completing at 110 was good, the thrust off this bottom trend line last week led me to see a triangle where we can see a,b,c,d,e – triangle complete and off to a new high ? CRUDE BULLISH
USD vs CAD: just a little bit higher (200 pips) we have some pretty major targets. while I am a DOLLAR BULL, also recognize that the Loonie is a small percentage of the overall index. LOONIE BULLISH (after a little more weakness)
Oil Services Index: the only thing “wrong” w/ this chart is that, a RULE of counting is 4 cannot go below 1. In this case it does, However, the Crude chart spikes thru but never closes below. so, I am keeping this count. Note, we smacked right into the .618 price projection area at/around 294 and are testing it again. the 306-307 level will be key.
So, our roadmap to follow is:
- Crude – breakout of triangle.
- Loonie – BUY a couple hundred pips lower
- Oil Services – break thru – with strength and conviction (read volume) levels show
one last, this is something to be patient w/ …. I would not recommend jumping all over this tomorrow but wait and see these levels get attacked … the GREAT thing about PATTERNS is we now have clear lines in the sand for where we are correct or wrong. Go back to the beginning of the post – w/ that divergence between the OSX and CAD-Crude the patterns will tell us which way this entire family (Crude, OSX, CAD) will resolve. It very well could go completely opposite but not until the pattern levels are targeted. they will either work or fail and then we’ll pounce