Note that with every higher intermediary high, the momentum (as measured by the indicator) isn't able to make new highs. This has lead me to review another possible scenario for the big picture outlook on oil .
A secondary consideration, is that what I have previously seen as a "leading diagonal" (see linked chart below)... isn't 100% perfect in that the internal waves 1 and 4 do not overlap. Now this doesn't automatically negate the previous analysis... but it does open up the door for the alternative view as presented on this chart.
The key thing that will make or break this alternative view will play out in the next few days... namely I'm keeping an eye on the . I strongly suspect that it will determine best as to whether the reviewed outlook is correct... or if the previous analysis still holds.
NAMELY - If we see the indicator produce a sell signal (cross over from above), BEFORE the indicator is able to lock a reading that is higher than the recent intermediary peak (2.0624)... then I will look to take this as a sell signal.
Alternative... if momentum does pick up and we see the surpass the wave i high (2. 2002 )... then I will have less hesitation about entering Long.
What has also contributed to my unease about jumping in Long just yet is that USUALLY... a wave 2 retracement will be quite deep into the preceding move. Now this is not guaranteed... but from my experience it should be expected as the norm. The major retracements we've seen so far haven't even surpassed 50% of their previous "swings"... this would suggest a very market... but the momentum is actually falling (at least for now)... which contradicts this!
All these things lead me to suspect that we might actually see a very deep retracement of the rally we've seen so far this year, and my current bias for now is actually to short oil if the previously mentioned criteria is satisfied.
I expect that we will have a momentum breakout within the next week... but I have no guarantees which direction it will go... my bias is currently towards the downside.
However another consideration is that if we were to return to the original wave count/observation before this post... we would be in a wave 3... which should produce the strongest part of the rally. The fact that there is currently ambiguity makes me nervous about whether indeed this is a wave 3 we are experiencing.
It should become clear in the next week