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.
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.
This straight, near linear fall is reminiscent of an 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.
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.
2 - It also aligns well with the predictive/forecasting model's first forecast, namely:
- TG-1 - 71.29 - 12 NOV 2014
Looking at the entire predictive/forecasting model's targets, there are two NUMERICAL targets:
1 - TG-1 - 71.29 - 12 NOV 2014
2 - TG-2 - 61.37 - 12 NOV 2014,
as well as two NOMINAL targets:
1 - TG-Lo - 50.71 - 12 NOV 2014
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.
Trend is decisively . Both Fibonacci measures and predictive/forecasting model have defined a nearby 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.
Predictive Analysis & Forecasting
Denver, Colorado - USA
Here is to hitting ALL targets, looking back at the charts from first posting ... 15 months ago:
Most recent chart;
At 1.618-Fib, price may have reached a nadir in $UKOil:
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:
As forecast, price is expected to face limited upside potential at this time, causing a reversal in the $UKoil vs. $USOil relative strength chart:
David Alcindor, CMT Affiliate
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 - 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:
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).
$UKOIL rally > 0.214 #fibonacci would likely represent #elliottwave 4th wave; Bears dominate:
$UKOIL retrace to 38.2 is likely just that: A retracement ... in #elliottwave terms:
@tradingview $brent #oil $USD