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Short

Crude oil Nears Support; Bearish Outlook | $UKOil #Brent #Forex

FX:UKOIL   Crude Oil (Brent)
2791 31 26
2 years ago
Friends,

Oil             has been in a downfall over the past several weeks, based on a variety of fundamental opinions, be it geo-strategically, cyclically or economically driven.

GEOMETRY:

Technically speaking, since mid-July 2014, price resolved itself out of a geometry following a protracted sideways defined by the A-B-C-D-E points. From July 14th to August 04th, price coiled about the lower border of that geometry, and since fell in a consistent angle with no interim rallies.


ELLIOTT WAVE:
This straight, near linear fall is reminiscent of an Elliott Wave core impulsive move, typical of its internal Wave-3, thus suggesting that the prior triangle that held price into suspension over several months was likely the unfolding of a preceding Wave-1 and Wave-2.


FIBONACCI:

From a standard 1.618-Fibonacci extension, then a mere projection using Wave-1 and Wave-2 as anchors would define a possible support at:

(Wave-1 / Wave-2) x 1.618-Fib = 69.60.

This level gains credence on the basis that:

1 - It aligns with a historical support when a prior Wave-2 (grey shade to the left) offered support to a historical level via the intermediary of a Wave-3 impulse.

and

2 - It also aligns well with the predictive/forecasting model's first forecast, namely:

- TG-1 - 71.29 - 12 NOV 2014


PREDICTIVE/FORECASTING MODEL;

Looking at the entire predictive/forecasting model's targets, there are two NUMERICAL targets:

1 - TG-1 - 71.29 - 12 NOV 2014

and

2 - TG-2 - 61.37 - 12 NOV 2014,

as well as two NOMINAL targets:

1 - TG-Lo - 50.71 - 12 NOV 2014

and

2 - TG-x - 39.15 - 12 NOV 2014.


As explained in prior analyses/charts, the numerical targets offer a HIGHER probability of hit, but a lesser level of reversibility. This means that IF and ONCE hit, price will likely RETRACE in a Fibonacci order, between 0.382 and 0.618.

In contrast, the nominal targets offer a LESSER probability of hit. This means that if and once hit, price will likely REVERSE (and not just retrace) in a Fibonacci order that should exceed 0.618, and potentially attain extensions in the 1.131, 1.414, or 1.618 order.


OVERALL:

Trend is decisively bearish . Both Fibonacci measures and predictive/forecasting model have defined a nearby support level in the 69.60-to-71.29 range. However, on its own, the model suggest a potentially deeper attainment levels of diminishing probability, but increasing structural relevance.

Cheers,


David Alcindor
Predictive Analysis & Forecasting
Denver, Colorado - USA


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Twitter: @4xForecaster
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9 months ago
Comment: 11 FEB 2016 - Chart Update:

Here is to hitting ALL targets, looking back at the charts from first posting ... 15 months ago:

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Best,


David Alcindor

PS:
Most recent chart;
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9 months ago
Comment: 11 FEB 2016 - ADDENDUM:

At 1.618-Fib, price may have reached a nadir in $UKOil:
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Best,

David Alcindor
9 months ago
Comment: 11 FEB 2016 - ADDENDUM #2:

Look for $17.21 being the next probable level of support if 1.618-Fib fails ... This would loosely correspond to the original $USOil's 21.02 target defined in FEB 2015:
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Best,

David Alcindor
7 months ago
Comment: 01 MAY 2016 - Chart Update / Tech-Note:

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As forecast, price is expected to face limited upside potential at this time, causing a reversal in the $UKoil vs. $USOil relative strength chart:

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Best,


David Alcindor, CMT Affiliate
David Alcindor, CMT Affiliate #227974
Alias: 4xForecaster (Twitter, LinkedIn, StockTwits)

Signal Service or Private Course - Contact: admin@KADAInstitute.com
All updates on https://twitter.com/4xForecaster
alex.a
2 years ago
Great analysis ~ Which countries produce oil? NOK, CAD, MXN, RUS, what else ~ keep rising then~ Thanks - so, whenever goes up, sell it ~
+1 Reply
4xForecaster PRO alex.a
2 years ago
Hello @alex.a - Of the countries that produce oil, the once I am most interested at the moment is $CAD, as a major Forex currency.

I am looking at $GBPCAD at the moment, and contemplate a potential short trade, not only based on the fundamental strength of Canada alone, but combined with $GBP weakening and the expectation that central bank will keep interest rates as they are.

Looking at other economies, I am not sure how to import any other information into a Forex translation, besides the majors, since they are many other influential factors that may weigh on any one of these currencies. With $CAD, it will depend on the strength of the US economy as a major consumer targeted market, but it will also depend on gold, as a major producer and exported.

If you look at Gold right now, the model's target at TG-Lo = 1134.65 got hit, and price rallied from that level on ward. However, there is no sustained bullish elan in price to suggest that Gold will rally. Therefore, I am not sure whether $CAD will benefit from this buoyancy as well.

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All in all, $UKOil is likely to find support at the levels defined, and a slight interim rally should offer the Forex trader a potential opportunity to consider positively-correlated currencies, especially those that can be double-boosted by commodity price rallying in both oil and gold.

$CAD would be such a player.

David Alcindor
+2 Reply
mrTylerDurden
2 years ago
there's an oversupply of oil in the market currently - 0,3 millino bar/day by the end of 2014. nothing can possibly make the prices surge
+1 Reply
4xForecaster PRO mrTylerDurden
2 years ago
Well, Saudi's could, but from the recent intel, they may have been asked to keep production at sustained level to help outstrip competitors and stress economies of US rival countries, where the domestic economies depend upon a >$85.00 bpd - Sort of makes sense.

The other corollary to this is that a lower oil price will also help such economies as China, whose engine of production demands on crude energy sources, and the importing economies upon which it depends in turn benefit from a lower transport cost as importers of China's good.

Other circulating intel alludes to the possibility that Gold is kept artificially low, allowing China to load up as it prepares to increase its reserve from a central bank level, but also through a freeing of import at the population level (thought to allow broaden its domestic reserve at no/low cost).

All this information is available through either Stratfor-global Intelligence (http://www.stratfor.com/topics/economics-and-finance), or ZeroHedge.com (http://www.zerohedge.com/news/2014-11-03/chinas-gold-strategy; http://www.zerohedge.com/news/2014-11-08/gold-economic-freedom ).

In any case, the oversupply theory was also alluded to, based on projection of slowing economies, such as China and that of Western consumers.

Gold and oil are two commodities worth watching over the next year, as they will be used as proxies weapons across economic rivals - David
+2 Reply
4xForecaster PRO 4xForecaster
2 years ago
Recent intel suggests that Lybia resumed production of another oil field - Even at this low a price, producing countries are caught in a conundrum, as they have to keep producing to maintain a revenue stream, yet still pressure price downwards by the mere activity of sustained production - Catch 22 - David
+2 Reply
4xForecaster PRO 4xForecaster
2 years ago
Source: Libya has resumed production at the El Sharara oil field, a spokesman from NOC said Nov. 12, @Reuters reported. http://pub.vitrue.com/tHKS
+3 Reply
4xForecaster PRO 4xForecaster
2 years ago
Sorry, link is advertisement for site. Article is not available outside membership - David
+3 Reply
There's A=C at 76. i think we will see a nice upward 'something' :) from there...
Reply
14 DEC 2014 - Update:

From Twitter:
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$UKOIL hit 2 numerical, high-prob targets; Eyes 2 nominal, low-prob targets:

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via @tradingview | $oil $WTIC $USOil
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David Alcindor
+2 Reply
Pip_Alchemist 4xForecaster
2 years ago
Great analysis mate!
+1 Reply
13 JAN 2015 - Update:

From Twitter:
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$UKOIL - #Oil chart hit all targets as forecast on 12 NOV 2014; TG-x = 39.15 remains pending:

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via @tradingview.com
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David Alcindor
+1 Reply
15 JAN 2015 - Update:

From Twitter:
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$UKOIL aims for extreme bearish 39.15 target: Still in force:

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@tradingview #oil #oilprice $UKOil $TWIC
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David Alcindor
+1 Reply
20 JAN 2015 - Update:

From Twitter:
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$UKOIL - Weekly chart remains open to forecast 39.15 target:

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via @tradingview | #ukoil #oilprices #oil $USOil
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David Alcindor
+1 Reply
22 JAN 2015 - Update:

From Twitter:
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$UKOIL eyes strong support @ 39.15; Reversal equilibrium to 83.65:

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@tradingview $WTI #oilprices #oil #ukoil #usoil
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David Alcindor
+1 Reply
22 JAN 2015 - NOTE: Must-Read Article from ZeroHedge.com


For the record, here is the L/T view of this weekly chart:

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Now, worth the read, taking this chart in its historical context:

From Twitter, today:
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$UKOil - Must read @zerohedge article:

- http://www.zerohedge.com/news/2015-01-22/saudi-succesion-its-impact-oil-markets-and-politics

… Rallying off of forecast would thus make sense:
-
Crude oil Nears Support; Bearish Outlook | $UKOil #Brent #Forex

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David Alcindor
+1 Reply
22 JAN 2015 - Update:

From Twitter:
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Why $UKOIL is likely to rise ... #elliottwave triangle nears completion:

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@tradingview #oil $USOIL #oilprices $WTI
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David Alcindor
+1 Reply
27 JAN 2015 - Update:

From Twitter:
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$UKOIL remains unchanged despite fundies; Target @ 39.15 still very much in force:

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@tradingview $brent $WTI $USOil
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David Alcindor
+2 Reply
IvanLabrie TOP 4xForecaster
2 years ago
Interesting way of labeling it. Definitely some impulsive legs in there.
Watching crude closely, thanks for sharing David.
Reply
02 FEB 2015 - Update:

From Twitter:
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$UKOIL off of a-c Line; Prob 4th #elliottwave consolidation forming; 39.15 intact:

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@tradingview $Brent #oil $USOil
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David Alcindor
+1 Reply
04 FEB 2015 - Update:

From Twitter:
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$UKOIL eyes 39.15 support; #elliottwave consolidation seen now as 4th wave:

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@tradingview $Brent $WTI #oilandgas
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David Alcindor
+2 Reply
09 FEB 2015 - Update:

From Twitter/Linked-In:
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$UKOIL / $Brent - Retracement expected to be short-lived; Bearish target at 39.15 remains intact:

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@tradingview
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David Alcindor
+1 Reply
13 FEB 2015 - Update:

From Twitter/Linked-In:
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$UKOIL retrace to 38.2 is likely just that: A retracement ... in #elliottwave terms:

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@tradingview $brent #oil $USD
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David Alcindor
Reply
16 FEB 2015 - Update:

From Twitter/Linked-In:
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$UKOIL rally > 0.214 #fibonacci would likely represent #elliottwave 4th wave; Bears dominate:

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@tradingview $Brent
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David Alcindor
Reply
15 MAY 2015 - Update: Still Bearish ...

From Twitter/LinkedIn:
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$UKOIL continues to rise to 38.2 #fibonacci mark, as forecast; Bearish Model sees limited upside:

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$brent #crudeoil
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David Alcindor
+2 Reply
10 JUN 2015 - UPDATE:

From Twitter/LinkedIn:
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$UKOIL remains under bearish pressure; Predictive/Forecasting Model still eyeing 39.15:

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$Brent #brent #oil #ukoil
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David Alcindor
+1 Reply
06 JUL 2015 - UPDATE:

From Twitter/LinkedIn:
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$UKOIL breaks lower lows; Predictive Model remains intent on 39.15 since last November:

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#ukoil $brent #oilandgas
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David Alcindor
Reply
02 AUG 2015 - UPDATE:

From Twitter/LinkedIn:
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$UKOIL continues to decline per NOV 2014 forecast; Bearish 39.15 target intact:

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$brent #brent #oil #oilandgas
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David Alcindor
+1 Reply
11 FEB 2016 - Chart Update:

Here is to hitting ALL targets, looking back at the charts from first posting ... 15 months ago:

snapshot


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Best,


David Alcindor

+1 Reply
plok
9 months ago
Thanks a lot for the update. The blue 1 and 2 in your last chart (addendum #2) is that a Geo being formed? Would that mean that point 3 could now have been formed just below $30 and that after a move up towards point 4 another leg down to new lows can be expected?

If the 1,618 extension now holds and oil moves up towards let's say the 'orange' area that you indicated, how would you mainly assess if it is a reversal or just a retracement? Do you mainly use the internal wave structure of the move up in combination with price action at fibonacci retracement (quant) levels?
+1 Reply
4xForecaster PRO plok
9 months ago
Hello, @plok:

1 - Yes, the blue outline implies a possible geometric development at this level, which would mimic the $USOil forecast - Following are the $UKOil chart from Addendum #2 and the current $USOil chart:

$UKOil:
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$USOil:
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You will note that the correlation between the $UKOil and $USOil often illustrates a lead in the $UKOil and a subsequent compliance in $USOil. I am not sure why this is occurring, and perhaps the Brent is a forward barometer of the US crude oil, but the resulting price action remains a high-correlation event.

In the US counter-part, I had drawn a geometry that remains intact. HOWEVER, Point-4 of this geometry is NEVER where most traders expect. So, I would not be surprised if price rallied to a higher level than the upper border of the geometry in order to finalize the residence of Point-4. This is a phenomenon I have observed too many times, as I dissected the Geo.

2 - The assessment of reversal versus retracement is based on the Predictive/Forecasting Model, which in this case favors lower lows. So this is clear, the Predictive/Forecasting Model is NOT based on the price action (it's a proprietary feature that I use to help define dominant trend, R/S levels, and forecast probable retracement versus reversal levels). However, once the "Model" defines a probable pathway, I use the high-probability value of the Geo to provide a visual pathway of probable price action, based on the internal anatomy of the Geo, which has a rather strict and reliable set of instructions (Google my alias: 4xForecaster and the Geo construction to access the multiple times I have defined it).

Best,

David Alcindor
+1 Reply
plok 4xForecaster
9 months ago
Thanks David, I have indeed made a reading list of some of your previous posts. For now, have a great weekend!
Reply
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