This is my first attempt at Elliot Wave Theory and I am enjoying it a fair bit.
I followed all guidelines for the Impulse wave and based on fibonacci ratios I believe that the impulse wave for
USOIL
has completed and we are now in the corrective wave. Since A and B waves have been completed and so far they adhere to the rules of the corrective wave.
Wave B = 50%, 61.8%, 76.4% or 85.4% of wave A
Wave C = 61.8%, 100%, or 123.6% of wave A
Now we are in the C wave and we are looking for target prices of $21.72 - $33.17. However, if Wave C reaches $40 then the corrective wave is actually the 3rd swing in an Impulse wave which is very good because there would still be another leg up which would be aiming for $45 - $50 mark at the end of of wave 5.
Looking outside Elliot Wave Theory we can see that the USA is struggling to keep people in doors, people are wanting to go back to work and many of the republican states aren't following the social distancing. With people returning back to work we can definitely see a rise in demand for oil as people start consuming. Couple consumption by the working class with production cuts then we can see justification for the recent upswing / corrective waves.
However, when we look at the bigger picture and factor in COVID-19 then can see a problem with demand and storage capacity when the virus isn't dealt with which is why this looks more like a corrective wave then the 3rd leg of an impulse wave. It all depends on COVID-19 and if the American population returns to work and begins consuming.
I followed all guidelines for the Impulse wave and based on fibonacci ratios I believe that the impulse wave for
USOIL
has completed and we are now in the corrective wave. Since A and B waves have been completed and so far they adhere to the rules of the corrective wave. Wave B = 50%, 61.8%, 76.4% or 85.4% of wave A
Wave C = 61.8%, 100%, or 123.6% of wave A
Now we are in the C wave and we are looking for target prices of $21.72 - $33.17. However, if Wave C reaches $40 then the corrective wave is actually the 3rd swing in an Impulse wave which is very good because there would still be another leg up which would be aiming for $45 - $50 mark at the end of of wave 5.
Looking outside Elliot Wave Theory we can see that the USA is struggling to keep people in doors, people are wanting to go back to work and many of the republican states aren't following the social distancing. With people returning back to work we can definitely see a rise in demand for oil as people start consuming. Couple consumption by the working class with production cuts then we can see justification for the recent upswing / corrective waves.
However, when we look at the bigger picture and factor in COVID-19 then can see a problem with demand and storage capacity when the virus isn't dealt with which is why this looks more like a corrective wave then the 3rd leg of an impulse wave. It all depends on COVID-19 and if the American population returns to work and begins consuming.
Trade closed: target reached:
What I have done is us USOIL to see the big picture with crude since it is priced on the underlying asset crude futures next in front. In this case it was July contract.
s3.amazonaws.com/tra...shots/q/QMR29FFh.png
We hit the first target of Wave C (61.8%) and we nearly got the the 100% of Wave A.
I used the Dragon Pattern to confirm my entry and exit position with the July Contact.
s3.amazonaws.com/tra...shots/e/eFV7KqjU.png
After I saw the big red candle after the first target was reach I moved the stoploss to the first target of $25.07. This morning I closed the position at $26.
Next step is determine the pullback so we can draw a new wave structure. In the meantime I will ride the wave down.
s3.amazonaws.com/tra...shots/q/QMR29FFh.png
We hit the first target of Wave C (61.8%) and we nearly got the the 100% of Wave A.
I used the Dragon Pattern to confirm my entry and exit position with the July Contact.
s3.amazonaws.com/tra...shots/e/eFV7KqjU.png
After I saw the big red candle after the first target was reach I moved the stoploss to the first target of $25.07. This morning I closed the position at $26.
Next step is determine the pullback so we can draw a new wave structure. In the meantime I will ride the wave down.
Dragon Pattern Chart: