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
Alias: 4xForecaster (Twitter, LinkedIn, StockTwits)
Signal Service or Private Course - Contact: MarketPredictiveAnalysis@gmail.com
All updates on https://twitter.com/4xForecaster
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