JWagnerFXTrader
Short

Oil Continues to Slip Lower - Low 40's Coming?

FX:USOIL   Crude Oil (WTI)
3548 17 27
Many times in the past, I’m asked how/where you begin counting Elliott Waves . There are 3 patterns I look for: 1) 5-3 combo, 2) Equal Wave Patterns, 3) Triangle patterns.

This morning, a triangle came to light that unlocked some wave relationships that are causing me to change my tune on Oil             . (For those who attended the US Opening Bell webinar this morning, I was bullish Oil             . In light of seeing this triangle below, I am changing my tune to bearish .)

When I changed the time frame of chart, the triangle in late April             was exposed. When drawing the 2-4 trend channel based on blue ‘iv’ triangle in late April             , it created an incredibly clean trend channel (red channel). These trend channels are useful for determining ending points for the fifth waves, in this case blue ‘v’.

This is important for a couple of reasons. First, notice how prices couldn’t penetrate the mid-line on May 6 (the dotted red line). This is quite bearish . The opposing end of the trend channel is the typical stopping point, yet in this case it couldn’t get half way there!

Secondly, this upward push could be the end of circle ‘iv’. Fourth waves typically retrace about 38% of its third wave. In this case, the 38% retracement level was at 63.50 and prices came very close to this level.

Therefore, with a very bearish ending wave to the upward push that exhausted near an important fib level, we elevate the bearish counts in the green notes. Both counts in the green box call for a move below 45.

If you like, give a thumbs up and follow. Feel free to share your EW counts on Oil             as well.
That looks like a mega falling wedge with divergence.
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Jay, looks like C done long ago, see the comparative chart below I mad it specially for you my friend.
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Here is quick labeling for usdcad.
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could you share your larger TF labeling please?
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Hi man, agree with w4 count but slightly disagree with w5 down count
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aibek aibek
the one is leading diagonal
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Nice chart - I was kicking something similar to your image around. I was concerned about the circle iii as being the shortest of i,iii, and v. The result sends us to the same place with more subdivisions to go lower.

Do you follow USDCAD? Do you have a count for it? Thanks.
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aibek JWagnerFXTrader
Hi J! (Tell me you first name pls)
You are right, I made recount and checked with EW website, they count different with both you and me here is the link http://www.elliottwave.com/images/freeupdates/image/mw%2007-05-2015oil.png
I am not following USDCAD at all, can't share the count though but you are right I should as it can give some clear clues, thanks for this hint.
You comparative chart of oil vs cad convinced me to follow the fx cross either.
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UPDATE: some wave clusters near 54 - may be a reactionary zone to sell

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That lines up with the USDCAD chart which suggests support near 1.2600 (original post linked in above...updated picture below)

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One separate point I'll follow when Oil or CAD take on strong price gyrations that is worth noting and that is Brent vs WTI.

Canadian's purchase oil at the retail pump mostly based on Brent. Producers sell oil more heavily weighted on WTI (and West Canada Select). Therefore, if WTI cannot keep up with Brent, CAD likely suffers. On the flip side, if WTI outpaces Brent, CAD may outperform.

Here's a recent chart of that comparison. Some food for thought.

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Yahia.Awes JWagnerFXTrader
This tells me we must be rebounding.
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