WTI Crude Oil ($WTIC)

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Rosalind Bailey
5 years ago
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1 WTI Crude Oil ($WTIC) Monthly While gold is giving us mixed signals, Crude Oil is not (which actually could help in analyzing gold, assuming that Crude Oil and Gold share the same fate and are

The pathway appears to be clearly lower on the monthly chart, arguing - again similar to Gold - that a C Wave correction is underway after finding confluence resistance at the $75 level (both from a

1 1 WTI Crude Oil ($WTIC) Monthly While gold is giving us mixed signals, Crude Oil is not (which actually could help in analyzing gold, assuming that Crude Oil and Gold share the same fate and are correlated positively). The pathway appears to be clearly lower on the monthly chart, arguing - again similar to Gold - that a C Wave correction is underway after finding confluence resistance at the $75 level (both from a convergence of EMAs and the 38.2% Fibonacci retracement from the 2008 high to the 2009 low). The 2009 rally has 'felt' corrective all the way up, and since January/February in these reports, I have been calling for a target in Crude to rally to the $70 area which has materialized. Once a target is met, we will assess the structure and the structure is almost overwhelmingly in favor of lower crude oil prices yet to come which could take us over the next few months to the $40 level or lower. 1

$2 Weekly We see a closer view of the same picture, and can now 'fractalize' the "B Wave into an expected three-wave (abc) structure which has completed again at the convergence of the 38.$

2 2 Weekly We see a closer view of the same picture, and can now 'fractalize' the "B Wave into an expected three-wave (abc) structure which has completed again at the convergence of the 38.2% Fibonacci Retracement and now the 200 week SMA. The only major potential support on the weekly chart is the $61 level which reflects the 20 week EMA which could indeed provide a short-term bounce, but once broken, the target will become clear - a full retracement (if not lower prices) than the $40 level which was hit in early

$With the Doji at the $60 support (reference the weekly chart), we could be ready to experience a pullback perhaps to the $64 level which would be a fractal Wave iv (4) move, but a break of $60 would$

3 3 Daily I am showing the internal Elliott primary count I have on Crude Oil. With the Doji at the $60 support (reference the weekly chart), we could be ready to experience a pullback perhaps to the $64 level which would be a fractal Wave iv (4) move, but a break of $60 would hint that price would move to challenge the $56 level. I would count on a slight bounce off this level (which could be bullish for stocks) but it might best be played off the intraday charts than trying to take a swing position to manage risk and take stops quicker should the move up fail to materialize. We see a triple-swing negative momentum divergence going into the highs of June (on each of the fractal impulse waves of "c") so that signals at least an intermediate if not long term top should be expected at the $72 levels. 3

$The doji at this level hints at a retracement up, though it would most likely only be a fourth-wave fractal of a 5-wave Elliott Move.$

4 4 Another reason I would be expecting a possible bounce would be due to the price achieving a 32.8% Fibonacci retracement of the December lows to the June highs. The doji at this level hints at a retracement up, though it would most likely only be a fourth-wave fractal of a 5-wave Elliott Move. Breaking beneath $60 would invalidate the 'bounce' view and would set-up $55/$57 as a minimum target. 4

5 US Dollar Index ($USD) Monthly The dollar here is similar to gold, in that interpretation is a little more difficult than normal so keep this in mind when trying to trade it or glean analysis from

5 5 US Dollar Index ($USD) Monthly The dollar here is similar to gold, in that interpretation is a little more difficult than normal so keep this in mind when trying to trade it or glean analysis from it - it's at a critical balance point and we need price to break from this level to get confident. For now, we're still in a long-term down-trend and price found resistance in early 2009 at the 38.2% retracement of the 2002 highs to the 2008 lows. Price is stair-stepping down off this level, but last month formed a 'spinning top' and so far we have a 'doji' so this isn't what we'd expect for a large downside bias. Price is beneath the 20 and 50 EMAs and is hugging the 20 for resistance. Let's drop to the lower frames for more insight. 5

6 Weekly I'm showing that we're currently at the 50% Fibonacci level from the 2008 lows to the 2009 highs, and that multiple dojis have formed at this level (a deep consolidation and pause which is

6 6 Weekly I'm showing that we're currently at the 50% Fibonacci level from the 2008 lows to the 2009 highs, and that multiple dojis have formed at this level (a deep consolidation and pause which is either a normal 4th wave retracement or a base for a higher move to form). A distinct negative momentum divergence formed on the March highs above $88 (as did a doji) which was the clearest sell-signal of the year. Now, we see a bullish engulfing hammer in early June which has resulted in a deep consolidation until now. The trend is down; price is beneath all EMAs, and there is a convergence of critical resistance at the $82 level. However, price could be pulled to this level as a counter-move so on any up-move, the $82 level would be an obvious resistance target. A break beneath $80 would trigger a possible down-move to test the 61.8% Fibonacci retracement which is situated at $ A fall in the dollar would be bullish for stocks and commodities, though if the Dollar held firm and rallied from these levels, it would result in a lower stock market and lower gold and crude prices. This is why understanding inter-market analysis is important. A movement in one market can either give you clues or directly influence another market. 6

$7 Daily Zooming in, we see a closer glimpse of the structure of the possible Elliott fractal move down.$

7 7 Daily Zooming in, we see a closer glimpse of the structure of the possible Elliott fractal move down. The one thing that slightly disturbs me about this count is that we see a distinct positive momentum divergence going into the wave 3 lows - normally, we would want to see a divergence heading into the 5th wave to hint that the move was terminating, so this is a slight non-confirmation of the June price lows. That being said, we do see a consolidation in the dollar which has taken place since June. Part of this is likely because of the technical strength in the Japanese Yen ($XJY) which has offset the consolidation/weakness in the Euro ($XEU). The Euro makes up 56% of the Dollar Index, and a falling Euro is bullish for the Dollar and a Rising Yen (around 16% of the index) is bearish for the dollar. The bearish effect of the super-strength in the Yen has offset the bullish benefit of a falling Euro which - in part - has led to this consolidation in the US Dollar Index. That being said, watch $81 for overhead resistance and $79.50 for support - a break of either level will give us clues into the next move for the dollar. As always, a rising dollar (should we break above $81) would be bearish for the stock market and commodities and bullish for bonds; and vice versa should the dollar break beneath $79 (rise in stocks, fall in bonds, rise in commodities). 7

8 8 DAILY Color Comparisons 8

9 9 WEEKLY Color Comparisons 9

10 10 Summary Comments Ten-Year Notes: The Monthly and Daily frame hint at bullishness, yet the buyers will have to overcome "cradle" resistance in the weekly charts. Watch to see if buyers can push the index past $ which would argue for higher prices, particularly if the Stock Market fails to hold the 875 level. S&P 500: Buyers HAVE to hold the $875 level or else multi-timeframe charts will trigger a potentially strong sell-move in the Index. There are slight bullish signals on the daily chart which could hint at a retracement/inflection move up, but should 875 and particularly 870 be broken cleanly, it could trigger a massive wave of selling which is the expected play. Gold: Gold is the most difficult market to interpret this week, so refer back to the full text for analysis. Bulls need to defend $900 but it appears that structure could be cracking to the downside which would surprise many people. Crude Oil: Like the S&P 500, Crude Oil is sitting at a critical juncture and buyers need to hold it up. We could see a short retracement up but if buyers fail to do so, the larger timeframe charts will be dominant and could eventually lead to a retest of prior support about the $40 level. Short-term however, price has come into confluence support. US Dollar Index: The dollar has consolidated in a tight range for a month, with overhead resistance at the $81 level. Structure appears to be calling for a swing lower in an Elliott sense, but we appear to be in or completing a Wave 4 correction which might have a little further to go to the upside. Disclaimer: All information is from sources deemed to be reliable, but there is no guarantee to the accuracy. Information is for educational purposes only and is not intended to give specific trading advice. Past performance is no guarantee of future performance. Investment/ trading carries significant risk of loss and you should consult your financial professional before investing or trading. Your financial advisor can give you specific financial advice that is appropriate to your needs, risk-tolerance, and financial position. Neither Corey Rosenbloom nor Afraid to Trade was compensated in any way by any of the broad markets, stocks, or securities discussed in this report. Corey Rosenbloom is compensated by the sale of this report and not by any underwriter or dealer associated with these markets. Opinions are based on widely-accepted methods of technical analysis including the Elliott Wave Principle, Oscillators/Indicators, Candle-charting analysis, Volume, Fibonacci, and other methods of analysis. No specific recommendation is given to buy, hold, or sell any of these markets/securities or exchange traded funds related to these markets. Neither Corey Rosenbloom nor Afraid to Trade is a Registered Investment Advisor. Long-term investment success relies on recognizing probabilities in price action for possible future outcomes, rather than absolute certainty risk-management is critical for success. Error and uncertainty are part of any form of market analysis. 10

10-Year Treasury Notes ($UST Price)

1 Weekly Inter-market Technical Report 10-Year Treasury Notes ($UST Price) Monthly The 10-Year Note has developed a clear rising parallel trend channel that reaches now to the $128 level with confluence