DanV
Short

Oil - A SLIPPERY CUSTOMER STILL IN BEARISH CYCLE

FX:USOIL   Crude Oil (WTI)
Due to limit in size of comment I will split this in 2 section (apologies)

There is much speculation about where oil             is headed with some suggestion drop to $20 or lower. Ignoring the Intra-Day charts, variety of charts has already been published here on TV with bullish targets 60 -75 and downside target from 30 - 20. One of the chart suggest that from 2008 high we could have AB=CD move, if the author is suggesting 100% relationship that would have the oil             price sub $0 which is not realistic. I have been sharing my view in Forex chat with others as well as at my chatroom at https://www.tradingview.com/chat/#E4bnOJSWcO1zDjBG . However, so many are asking me about my view on oil             , therefore, I feel it is time to publish a chart.

NOTE: whilst many are looking for relatively short term view over next few days to weeks, I feel it is not possible to put price action over such period in to context of overall larger degree cycle.

Whilst publishing a daily chart to meet the need of most traders here, I will emphasise larger degree cycle which is near impossible to anticipate and could prove completely wrong, nevertheless, it is still necessary to consider and see how future price either confirms or proves it wrong. My attempt to extrapolate such anticipation of price action over longer term is purely based on my interpretation of Elliott Waves with full understanding that this will not be for all and many would dispute the validity. Hopefully those who do feel they have alternative views and reasoning, then they will be gracious enough to share their charts with details rather than just being rude and abusive.

BACK GROUND: (Please see Monthly & Weekly Charts below)
Since July 2008, all time high Oil             has entered a larger degree bearish cycle with the initial impulsive 5 wave decline to form Feb 2009 low. Based on Elliott Wave Principle, we would have expected an "abc zigzag" up as retracement before next leg down. However we have a zizgag but not an "abc", rather it is wxy resulting in retracement high in April 2011. Since then we appear to have another "wxy" and are progressing in larger wave C of Y.

If this interpretation is correct then we either have flat correction suggesting that once completed, we could have strong 5 wave impulsive move that could retest April 2011 High or continue to get wxy zigzag and form what is called 3-3-3-3-3 contracting triangle. With OPEC producers unwilling to make drastic cut to future oil             production, I feel that we are more likely to develop a triangle over several years. Similarly 2008 high was in my view either a wave 3 high or more likely a wave 5 high of a much larger degree that lasted several decades, hence the overall correction with final low to forms correspondingly over a much larger time period. Historically oil             has declined several times in the magnitude of 78% - 80% retracement of its bullish move, therefore it will be nothing new on this occasion, if it does again.

Turning To Current Price Action:
That said the recent decline I feel started in Aug 2013 high was wave "b", and are progressing in wave "c", which should have an impulsive 5 waves decline and could be in final stage of wave 3, namely minor wave "v" of 3. If correct we should see potential intermediate bottom around 40 as round number to complete wave 3. Hence there will be several opportunities to trade both bullish and bearish swings as we see this progresses complete.

DanV MOD
2 years ago
Part 2

Summary - Short Term:
1. After the recent low we have retraced wave "iv" of 3 which appears to be completed.
2. Could be in early stage of wave "v" or 3. A drop below 48 will confirm.
3. However, it is in a shorting zone with potential minor wave i of "v" of 3 is in progress.
4. If correct, stop could be above 52.50
5. downside target for completion of wave 3 is around 40, which might form possible RSI divergence on Daily chart.
6. Also this zone has several Fibs confluence and previous structure resistance that could now be support.

Completion of wave 3 in around 40, will offer long trade back towards 60 - 65 in wave 4 of this bearish cycle. The larger picture noted above might be rather difficult to grasp for many, hence, I will post a short video explaining this shortly. Stay tuned and check back later.

As always, do your own analysis for your trade requirement. Select to follow me and the chart for notification of future updates. If you like the analysis then please indicate this by thumbs up, constructive comments and sharing with others. If you have an alternative idea then please share for all to learn from.

Thank you for taking the time to read my analysis.

DanV
danv-charting.com
Reply
DanV MOD
2 years ago
Monthly Chart -
snapshot
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FeelsFX
2 years ago
if i we go lower to 42 it would complete a bat pattern in weekly
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DanV MOD FeelsFX
2 years ago
Hi, Thank you for your comment. It is entirely possible.
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DanV MOD
2 years ago
Weekly Chart -
snapshot
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FeelsFX DanV
2 years ago
snapshot
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DanV MOD FeelsFX
2 years ago
Yes, I see what you mean. Also your harmonic patter could stretch to include a retracement wave 4 on my weekly chart and final wave 5 down. But we have similar views overall.
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PlayDefence DanV
a year ago
snapshot

Hi, DanV. I got my oil monthly EW counts, but not sure if I'm do it right, it looks like a huge leading diagonal.
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DanV MOD PlayDefence
a year ago
Sorry, I didn't see your chart till now. So my apologies for late reply.

It looks interesting. Though much depends on data earlier than 1987. Because the price action since 1987 to 1999 appears to be side ways correction. Hence it is difficult to comment on your count. My initial reaction is that it probably is incorrect.

However, recently I have come across a chart with price data pre-1987 so in my next update I might be able to see if it is possible to put wave (3) top where you have it on your chart. Thanks for sharing your chart analysis.
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PlayDefence DanV
a year ago
Thanks for detailed comment.
Reply
hrimiuc
2 years ago
depends what will do SIS
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DanV MOD hrimiuc
2 years ago
Hi Thanks for your comment. However, I am sorry I do not follow you. What do you mean by SIS?
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hrimiuc DanV
2 years ago
sorry i men ISIS (Islamic State)
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DanV MOD hrimiuc
2 years ago
Ah, I see. Yes you are correct. But so far the OPEC have said they will not have cut production and can live with price around $40. So it remains to be seen how this will translate into reality.
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jangseohee
2 years ago
SPX and OIl co-relate a lot this day
snapshot
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DanV MOD jangseohee
2 years ago
Thankyou for sharing your chart. definitely highlights the price action am anticipating and would be confirmed on break of that minor rising channel on your chart.
+1 Reply
jangseohee DanV
2 years ago
No mention DanV
if price manage to break up of that channel, then it will initiate totally diff scenario :-0
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AristotelCostel
2 years ago
Thanks for this structure of the price development. :D

I think Pretcher's elliotist preach about the 10$ price and I kindly agree (debt deflation). :)
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jangseohee AristotelCostel
2 years ago
25 dollar is already bad enough, not to say about 10 bucks, well pple are saying good for consumers LOL
CL1!, drop to channel bottom?
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DanV MOD jangseohee
2 years ago
Could do. Point to remember though is that in the past most bearish leg has been limited to around 78% drop in price. So if that holds we could be looking at around $12 -15. In that case I would have to revise my counts to simple ABC zigzag. However, I do not fell that is likely due to the fact that initial decline of April 2011 high is not impulsive but a zigzag. Hence I am leaning towards my triangle theory for now with focus on low for this bearish leg around $38 - $40.
+1 Reply
DanV MOD AristotelCostel
2 years ago
Hi. Thanks for your comment. Whilst your thoughts on deflation might well be right, $10 might be possible sometime in the future. However, it is not likely in the next few years based on that possible triangle I am suggesting.
+2 Reply
SunnyBTC PRO DanV
2 years ago
Hi Dan. Do you think we've begun wave A retracement yet? Looks pretty impulsive so far. I think we may be in wave 3 of A atm. What do you think?
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DanV MOD SunnyBTC
2 years ago
Not sure which wave A you mean. But we could have larger triangle wave 4 forming. Will review once it is clear enough
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SunnyBTC PRO DanV
2 years ago
great thanks!
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HiTech PRO
2 years ago
Dan, you have monthly, weekly and daily charts, Id like to share 4h chart as well
USOIL SHORT TRADE SETUP
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DanV MOD HiTech
2 years ago
Hi, thank you for sharing your chart and your comments. From EW perceptive I see more downside though the counts are not entirely clear. Could retest the recent low or go on to choppy side ways congestion.
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HiTech PRO DanV
2 years ago
To be honest with you I don't look much into the future since there are too many variables that could change the direction over time. But at the moment it looks bearish for a short term. Although current fundamentals should push price higher.
+1 Reply
DanV MOD HiTech
2 years ago
I agree. Based on my DXY chart, USD still have room to the upside in it's final leg for potential completion that could suggest weakness for oil. So agree with your bearish outlook.
+1 Reply
HiTech PRO DanV
2 years ago
Also I'd like to take this opportunity to thank you for all the massive work you do for everyone to learn, truly amazing technician you are .... thumbs up
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DanV MOD HiTech
2 years ago
Thankyou for your appreciation. It makes it all worthwhile.
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MIchaelTran
a year ago
hi, DanV, this is the amazing wave count, I can see price touch exactly at (3) - (4) - (5) ! !
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DanV MOD MIchaelTran
a year ago
Thankyou for your compliment. I appreciate it.
+1 Reply
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