Crude Oil (CL_F) Elliott Wave Analysis

Crude Oil (CL_F) looking for buying area

Short term Elliottwave view in Crude Oil (CL_F) suggests that the instrument is currently correcting cycle from 11/14/2016 low (42.21) in 3, 7, or 11 swing before the next leg higher. The decline starting from 2/23 high (54.94) is unfolding as a double three Elliottwave structure where wave ((w)) ended at 52.54 and wave ((x)) ended at 53.80. Near term focus is on 52.47 – 52.64 area to complete wave (w) of ((y)), then Crude Oil should bounce in wave (y) of ((y)) before turning lower again towards as low as 49.34 – 50.41 area, provided that pivot at 53.8 high remains intact. We don’t like selling the proposed pullback and expect the next buying area of 49.34 – 50.41 to find dip buyers for the next leg higher or at least a 3 waves bounce.

CL_F 1 hour chart 03.08.2017


Crude Oil (CL_F) Elliott Wave View: Ending a Flat Correction

Short term Elliottwave view in Crude Oil (CL_F) suggests that the instrument is currently correcting cycle from 11/14/2016 low (42.21) in 3, 7, or 11 swing before the next leg higher. Revised view suggests the decline starting from 1/3 high (55.24) is unfolding as a flat Elliottwave structure where Minor wave A ended at 50.71 and Minor wave B ended at 54.94. Minor wave C is in progress and subdivided as 5 waves diagonal where Minute wave ((i)) ended at 52.54, Minute wave ((ii)) ended at 53.8, and Minute wave ((iii)) ended at 50.05. A bounce in Minute wave ((iv)) is expected now followed by another low in Minute wave ((v)) towards 47.6 – 49.34 area to end cycle from 1/3 high. Afterwards, expect Crude Oil to resume the rally higher or at least bounce in 3 waves to correct the cycle from 1/3 high. We don’t like selling the proposed pullback and expect buyers to appear from 47.6 – 49.34 area for at least 3 waves bounce, provided that pivot at 11/14/2016 (42.21) stays intact.

CL_F 1 Hour Chart 03.09.2017


CL_F Elliott Wave View: Bounce expected soon

Short term Elliottwave view in Crude Oil (CL_F) suggests that the instrument is currently correcting cycle from 11/14/2016 low (42.21) in 3, 7, or 11 swing before the next leg higher. Revised view suggests the decline starting from 1/3 high (55.24) is unfolding as a flat Elliottwave structure where Minor wave A ended at 50.71 and Minor wave B ended at 54.94. Minor wave C is in progress and subdivided as 5 waves diagonal where Minute wave ((i)) ended at 52.54, Minute wave ((ii)) ended at 53.8, and Minute wave ((iii)) ended at 50.05 and Minute wave ((iv)) ended at 50.85. The current pullback has reached minimum swing and extension to finish cycle from 1/3 high, but while short term bounce fails below 50.85, another leg lower can’t be ruled out towards 46.8 – 47.5 area to end Intermediate wave (4) pullback. Afterwards, look for Crude Oil to resume the rally higher or at least bounce in 3 waves to correct cycle from 1/3 high. We don’t like selling the proposed pullback and expect Crude Oil to find support soon once wave ((v)) of (4) is confirmed complete, provided that pivot at 11/14/2016 (42.21) stays intact.

CL_F 1 Hour Chart 03.10.2017


Crude Oil (CL_F) Elliott Wave View: 5 Wave Impulse

Crude Oil (CL_F) started rallying from 03/22 low in a bullish structure which still needs another leg higher to become 5 impulsive waves. The instrument ended the minute wave (( iv )) at the 23.6% Fibonacci retracement area 49.96 from which it managed to bounce higher to resume the move to the upside looking to reach the minimum target of minute wave (( v )) at the inverse 1.236 – 1.618 Fibonacci extension of minute wave (( iv )) that will be at 51.02 – 51.37 area. An other methods for calculating the 5th wave is by measuring (( v )) = (( i )) which gives us a target around the equal legs area at 51.27 – 51.61 and the last methods would be the 61.8 Fibonacci extension of waves (( i )) + (( iii )) that gives us a higher target around 52.19 area.
After ending 5 waves up, Crude Oil should make a 3 wave pull back and extend higher provided 5 waves up from 03/22 low is not part of an expanded FLAT. In either case, from one of the above mentioned area, we can see Crude Oil pulling back in 3 waves at least. We don’t like selling it even after wave ((v)) up has completed as we don’t pick tops or bottoms and instrument has a bullish 5 swings sequence in the daily chart also.

Crude Oil (CL_F) 1 Hour Elliott Wave Chart 4.4.2017


CL_F Elliott Wave View: Ending a cycle

Short term Elliott Wave view in Crude Oil (CL_F) suggests that cycle from 3/22 low (47.01) is unfolding as a double three Elliott wave structure where Minute wave ((w)) ended at 50.85 and Minute wave ((x)) ended at 49.88. Minute wave ((y)) is in progress and the internal is unfolding also as a double three Elliott wave structure where Minutte wave (w) ended at 52.94 and Minutte wave (x) pullback ended at 51.49. Near term, while pullbacks stay above 51.51, focus is on 53.71 – 54.61 area to complete Minor wave 1 and end cycle from 3/22 low, then Crude Oil should pullback in Minor wave 2 to correct cycle from 3/22 low before the rally resumes. We don’t like selling CL_F and expect buyers to appear once Minor wave 2 pullback is complete in 3, 7, or 11 swing for an extension higher.

CL_F 1 Hour Elliott Wave Chart 04/11/2017


CL_F Elliott Wave View: Mature Cycle

Short term Elliott Wave view in Crude Oil (CL_F) suggests that cycle from 3/22 low (47.01) is unfolding as a double three Elliott wave structure where Minute wave ((w)) ended at 50.85 and Minute wave ((x)) ended at 49.88. Minute wave ((y)) is in progress and the internal is unfolding also as a double three Elliott wave structure where Minutte wave (w) ended at 52.94 and Minutte wave (x) pullback ended at 51.49. Cycle from 3/22 low is mature but near term, while pullbacks stay above 51.49, Crude has scope to extend higher to 53.71 – 54.61 area to complete Minor wave 1 and end cycle from 3/22 low, then Crude Oil should pullback in Minor wave 2 to correct cycle from 3/22 low before the rally resumes. We don’t like selling the pullback and expect buyers to appear once Minor wave 2 pullback is complete in 3, 7, or 11 swing for an extension higher.

CL_F 1 Hour Elliott Wave Chart 04/12/2017


CL_F Oil Elliott Wave View: Pullback in progress

Oil Short Term Elliott Wave suggests that the decline from 8/1 peak is unfolding as a double three Elliott Wave Structure where Minute wave ((w)) ended at 46.46 and Minute wave ((x)) ended at 48.76. Oil has since made a new low below Minute wave ((w)) at 46.46 suggesting the next leg lower has started. Wave ((y)) is in progress and also subdivided as a double three where Minutte wave (w) ended at 46.15 and Minutte wave (x) is proposed complete at 46.96.

Near term, while bounces stay below Minute wave ((x)) at 48.76, Oil has scope to extend lower towards 43.92 – 44.85. This is an inflection area where Minute wave ((w)) = Minute wave ((y)) and buyers can appear in this area for at least a 3 waves bounce. We don’t like selling Oil and expect buyers to appear at 43.92 – 44.85 area (if reached) for at least a 3 waves bounce, provided that pivot at 6/21 low (42.07) remains intact.

Oil 1 Hour Elliott Wave Chart

Petroyuan Can Accelerate the De-Dollarization

The move away from Petrodollar
In 1974, US President Richard Nixon and King Faisal from Saudi Arabia struck a deal. This deal gave birth to the petrodollar system which still lasts until this day. The deal involves Saudi Arabia selling oil to its largest buyer back then, the U.S. In turn, the U.S. provides Saudi Arabia with money, military aid, and political support. The Saudis then reinvest billions of their petrodollar revenue back in U.S. Treasury bonds.

Since that seminal deal, Oil has traded in U.S. dollars almost exclusively, even when the buyers and producers are not American. The consequence of the dollar-for-oil trade is massive. It creates a huge demand for dollars, therefore establishing US Dollar’s hegemony in world trade. The arrangement has also allowed the U.S. to run a huge deficit and borrow money at very low interest rates to finance the U.S. spending and growth for the next 4 decades.

In recent years however, several nations have tried to abandon petrodollar. The incentives come from the increasingly used tactic of economic sanctions by the Western nations. Washington for example has targeted the Russian economy and imposed an economic burden to force Moscow into submission. In response, Russia has gradually moved away from the reliance to U.S. dollar. Russia worked with China to create alternative to the SWIFT payment system which is not controlled by Western interest. China and Russia have also agreed to use yuan and ruble for bilateral oil trading. A non-dollar trading system will allow countries to bypass and counter the impact of the sanctions. This move away from petrodollar has lessened the US ability to use the dollar as a weapon.

The Alternative of Petroyuan
Today, China is replacing the U.S. position as the top oil importer. From China’s point of view, it makes sense to use Yuan to price the world’s most important commodity. Just as petrodollar creates more demand for US dollar and support U.S. economy in the past 4 decades, petroyuan can also stimulate demand for things in China, whether goods and services, Panda bonds (yuan-denominated bonds), or securities.

To this end, Beijing is said to introduce oil futures benchmark denominated in Yuan in coming months. In July, the Shanghai INE (International Energy Exchange) has completed four-step trial in crude oil futures denominated in yuan. The INE would try to launch it by the end of the year. In the bid to establish petroyuan, in recent years China has also been actively courting the biggest oil producer, Saudi Arabia, to accept Yuan as the currency for oil trade. Many believe that as soon as Saudi Arabia moves to accept Yuan for oil trade, the rest of the oil players may follow suit. The issue however is China’s closed capital market and the inability to move Chinese currency out of the country. To alleviate this fear, China is said to provide an option for the oil producers to convert the Yuan to physical gold in Shanghai / Hong Kong exchange.

For sure, it won’t be easy to replace the dollar and there are still challenges as China needs to convince major countries to participate. In addition, Saudi Arabia can meet a blowback from their long-term ally the U.S. Recent development however suggests Saudi Arabia’s relationship with China is getting warmer. In May this year, King Salman oversaw the signing of deals with China worth $65 billion. King Salman also publicly said he hoped China can play a greater role in Middle East affairs. Then in August this year, China and Saudi Arabia inked another $70 billion of new deals. The deal includes investment, trade, energy, postal service, communications, and media.

Although U.S Dollar may not lose its status as the world reserve currency overnight, the launching of Yuan-denominated crude oil benchmark can mark a new beginning of the end of Petrodollar.

What happens to dollar and Oil with the introduction of Petroyuan?


An overlay of weekly chart between Oil (CL_F) and inverted DXY (Inverted US. Dollar) above shows a strong positive correlation between the two. When Oil prices go up, the inverted DXY chart also goes up which means that US dollar declines. They also have the same major tops and bottoms in 2008, 2011, and 2015.

The introduction of Yuan-denominated oil futures benchmark by China in coming months may represent a big shift in the global order. It could potentially start the progressive decline in US Dollar. To start, there will be lesser demand for U.S. securities across the board. Secondly, Carl Weinberg, chief economist at High Frequency Economics estimates it will take away between $600 billion and $800 billion worth of transactions out of the dollar.

Based on the correlation chart above, we should also see Oil priced in dollar starting to rise as the U.S. dollar lose its value. Not only that, we should also see Gold and other commodity’s price rallying in dollar’s term. The chart below shows an overlay between Gold and Oil which also shows a positive correlation

3 Likes

CL_F Elliott Wave short-term view suggests that the decline to 61.80 on 4/06/2018 low ended Intermediate wave (2). Above from there, Intermediate wave (3) remains in progress as Zigzag Elliott Wave structure. Looking to extend higher towards 70.43-72.47 area at a minimum. Up from 61.80 low, the instrument made a strong rally higher. And ended Minor wave A at 67.45 high in 5 waves structure.

The internals of Minor wave A unfolded in 5 waves impulse Elliott Wave structure where Minute wave ((i)) at 62.43, Minute wave ((ii)) ended at 62.09. Minute wave ((iii)) ended at 66.44 and Minute wave ((iv)) ended at 65.71 low. And Minute wave ((v)) of A ended at 67.45. The instrument then made a 3 waves correction lower in Minor wave B pullback as a Flat. Down from 67.45, Minute wave ((a)) at 66 low, Minute wave ((b)) at 67.76 and Minute wave (©) of B ended at 65.56 low.

Above from there, the instrument already broke to new highs confirming the next extension higher in Minor wave C of (3). Therefore looking for the extension higher towards 70.43-72.47 as noted above. Up from 65.56 low, the instrument is expected to end 5 waves in Minute wave ((i)) of C soon. And should see a pullback in Minute wave ((ii)) of C in 3, 7 or 11 swings before further upside is seen. We don’t like selling it.

CL_F Elliott Wave 1 Hour Chart

OIL Elliott Wave Impulse Structure Calling For More Upside

OIL short-term Elliott Wave view suggests that the decline to $63.59 on 6/18/2018 low ended primary wave ((4)) pullback. Above from there, the instrument has rallied to new highs already. And confirming the next extension higher taking place in primary wave ((5)). The rally higher from $63.59 low is taking the form of Elliott wave impulse structure with extension favoring more upside in the instrument.

Up from $63.59 low, the rally to $66.53 high ended intermediate wave (1) in lesser degree 5 waves structure. Down from there, intermediate wave (2) ended at $64.34 low. Then up from there, intermediate wave (3) remains in progress in another 5 waves structure within lesser degree cycles. And expected to show sub-division of 5 waves structure in each leg higher i.e Minor wave 1, 3 & 5. Above from $64.34 low, Minor wave 1 of (3) ended in 5 waves at $69.44. Minor wave 2 of (3) ended at 67.72 low. Minor wave 3 of (3) is expected to complete soon in-between 123.6%-161.8% Fibonacci extension area of Minor wave 1-2 at 72.75 – 73.94 area. Afterwards, the instrument is expected to do a pullback in Minor wave 4 of (3) before further upside extension is seen. We don’t like selling it into a proposed pullback.

OIL 1 Hour Elliott Wave Chart

OIL Elliott Wave View: Providing Buying Opportunity Soon

OIL short-term Elliott Wave view suggests that the pullback to $63.39 on 6/18/2018 low ended primary wave ((4)). Up from there, the instrument rallied strongly to the upside and went on to make new high for the year. A rally from there took place in the form of an Impulse Elliott wave structure with extension with lesser degree oscillation showing the sub-division of 5 waves structure in each leg higher.

The internals of rally from $63.39 low ended Minor wave 1 in 5 waves at $66.53. Then the pullback to $64.34 low ended Minor wave 2 in 3 swings. Above from there, instrument rallied higher strongly in Minor wave 3 and ended another 5 waves at $74.46 high. Down from there the pullback to $72.51 low ended Minor wave 4. Then a rally to $75.27 high ended Minor wave 5 and also completed Intermediate wave (1) higher.

Below from there, the instrument is pulling back to correct cycle from 6/18 low ($63.39) in Intermediate wave (2) and expected to find buyers in 3, 7 or 11 swings. Currently, the instrument already did a 3 waves pullback in Minor wave W at $72.14, which is located inside $72.39-$71.82 blue box area and bounced higher. However, while it stays below the $75.27 high, the instrument is expected to do a double correction in 7 swings lower towards $70.74-$69.53, which is 123.6%-161.8% Fibonacci extension area of Minor wave W-X before it resumes the upside provided the pivot from $63.39 low stays intact. We don’t like selling it and expect Oil to stay supported as far as a pivot at $63.39 low is holding.

OIL 1 Hour Elliott Wave Chart

Elliott Wave Analysis: OIL Starting The Next Leg Lower

OIL short-term Elliott wave analysis suggests that the bounce to $71.13 high ended primary wave ((B)) bounce against 7/03/2018 peak ($75.27). Primary wave (©) lower currently remains in progress as Elliott Wave impulse structure looking for more downside. Down from $71.13 high, the decline to $67.96 low ended intermediate wave (1) in 5 waves structure. Above from there, the bounce to $70.43 high ended intermediate wave (2). The internals of Intermediate wave (2) unfolded as Elliott Wave double three structure where the initial rally to $69.92 completed Minor wave W of (2) as a Flat.

The subsequent pullback to $68.26 low ended Minor wave X of (2) as Elliott Wave Zigzag correction. Finally, the third leg higher in Minor wave Y of (2) ended at $69.92 high as Zigzag structure. Down from there, Intermediate wave (3) lower is in progress as an impulse and started nesting with Minor wave 1 ended in 5 waves at $67.31 low. Up from there, Minor wave 2 recovery remains in progress in 3, 7 or 11 swings & expected to fail below $70.43 high in first degree and against $71.13 in the second degree for more downside. As far as rally fails below 71.13, expect Oil to see further downside.

OIL 1 Hour Elliott Wave Chart

OIL Elliott Wave Analysis: Extending to the Downside

Oil ticker symbol: CL_F short-term Elliott wave analysis suggests that the bounce to $70.44 high ended intermediate wave (2). The internals of that bounce took place as Elliott wave double correction where Minor wave W ended in 3 swings at $69.92. From there, the pullback to $68.26 completed the Minor wave X in 3 swings. Then a bounce higher to $70.44 high ended Minor wave Y in another 3 swings & also completed Intermediate wave (2).

Down from there, the decline is taking place as Elliott wave impulse within intermediate wave (3) lower with the sub-division of 5 waves structure in Minor wave 1, 3 & 5. The initial decline from $70.44 high to $66.92 low ended Minor wave 1 of (3). The lesser degree cycles within that decline also unfolded in 5 waves structure & ended Minute wave ((i)) at $69.91. Minute wave ((ii)) ended at $70.22, Minute wave ((iii)) ended at $67.31 low, Minute wave ((iv)) bounce ended at $68.15 and Minute wave ((v)) of 1 ended at $66.92 low. Above from there, the bounce to $69.92 high ended Minor wave 2.

The internals of Minor wave 2 unfolded in 3 swings as Elliott wave zigzag correction where Minute wave ((a)) ended in 5 waves at $69.36. Minute wave ((b)) ended at $67.87 low and the bounce to $69.92 high ended Minute wave (©) of 2. Down from there, Minor wave 3 remain in progress in another 5 waves and as far as bounces fail below $69.92 high and more importantly the pivot from $70.44 high stays intact instrument is expected to see more downside. We don’t like buying it as the right side tag is lower.

OIL 1 Hour Elliott Wave Chart

Hello fellow traders. In this technical blog we’re going to take a quick look at the charts of OIL published in members area of the website. As our members know, we were calling for decline in OIL from November 2018. As of right now the commodity is correcting the cycle from the 26.18 low. Proposed pull back is unfolding as Expanded Elliott Wave Flat Structure, when Oil still has scope to keep extending lower. We advised clients to avoid buying OIL and keep on favoring the short side. In the charts below, we’re going to explain the Elliott Wave structure and forecast.

OIL Elliott Wave 1 Hour Asia Chart 11.16.2018

As we can see at the charts below OIL is doing short term recovery that is unfolding as Elliott Wave double three pattern. It’s expected to make another leg up to complete 7 swings in proposed bounce. Recovery has scope to reach 58.25 + area ( blue box) , where we would like to be sellers. We recommended members to avoid buying OIL and keep selling short term rallies in 3,7,11 swings for further downside. Stop Loss of the trade is a break above 1.618 Fibonacci extension (59.87)

OIL Elliott Wave 1 Hour New York Midday Chart 11.16.2018

We got the proposed leg up , 7th swing as expected. However sellers appeared early and pushed the price down before proposed area was reached. The price has missed blue box by a few points. Now wave ((4)) recovery looks completed at 57.99 high, and we are calling for further weakness. We need to see break of previous low to confirm next leg down is in progress.

OIL Elliott Wave 1 Hour London Chart 11.21.2018

The price has held below 57.99 peak and we got proposed decline. Eventually OIL has made new short term low, confirming next leg down is in progress. Now the commodity has opened new cycle to the downside and it can be sold in 3,7,11 swings against the 57.99 peak. We don’t advise buying OIL and favor the short side against the 57.99 peak.

OIL Elliott Wave 1 Hour Chart 11.28.2018

The price has held invalidation level at 57.99 and we got a nice decline as expected. Short term recovery wave ((4)) has reached its equal legs at 52.48. It found sellers immediately and gave us nice reaction from the blue box. Members who are in short positions from there should be already risk free. We are calling wave ((4)) recovery completed.

OIL Elliott Wave 1 Hour Chart 11.30.2018

We got new low in OIL, however buyers are also strong at this stage and we’re getting choppy price action. We see possibilities of more short term strength toward 52.52-54.28 area

OIL Elliott Wave 1 Hour Chart 12.08.2018

Wave ((4)) recovery has taken form of Elliott Wave Flat pattern and completed at 54.59 . Now as far as the price holds below 54.59 peak, we expect further decline.

Keep in mind market is very dynamic and proposed view could have ended in the mean time. Best instruments to trade are those having incomplete bullish or bearish swings sequences. We put them in Sequence Report and best among them are shown in the Live Trading Room.

Oil’s (CL_F) short term Elliott Wave view shows that the decline from 10/3/2018 high ended as 5 waves impulse in wave a at $42.41. The cycle from 10/3/2018 high has ended and Oil should now see at least a 3 waves rally. The rally from $42.41 is unfolding as Elliott Wave zigzag structure where wave ((A)) is currently in progress.

An internal of a zigzag is 5-3-5, which means that wave ((A)) should subdivide in 5 waves impulse Elliott Wave structure. Up from $42.41, wave (1) ended at $47, wave (2) ended at $44.35, and wave (3) ended at $52.58. Expect a pullback in wave (4) which ideally ends at 23.6 – 38.2 Fibonacci Retracement of wave (3) at $49.4 – $50.62. Oil should then rally 1 more leg higher in wave (5) to end 5 waves up and complete wave ((A)). After wave ((A)) is complete, it should pullback in wave ((B)) to correct rally from 12/25/2018 low ($42.41) in 3, 7, or 11 swing before the rally resumes again in wave (©).

Oil 1 Hour Asia Elliott Wave Chart