Crude Oil

A lot of Oil has passed under the bridge (or in the pipeline) since I wrote about Crude Oil in May 09. It is time to visit the black gold yet again.


My homegrown Elliot Wave count on Crude's advance since the beginning of 2009 tells me that Oil has topped or better yet, will top between 86 and 90. That is full 10 points away! What is the use of this "wide" target? Go figure.

I can count 5 waves up to 80 but can also see the alternate count for the 5th wave advance to 86 to 90. I have not measured the exact target as yet!

I do note that the RSI is showing weakening momentum. The open interest has been rising but not at the level of previous bull market in oil. That is understandable.

Looking at the futures chart (not shown here) for light Nymex light sweet (miNY ETH), I can imagine that 5th wave has more advance left.

If the 5th wave moves higher, it may resonate with US Dollar Index dropping below 74.50 to 70 - 72 area. Thereafter, a violent surge in US Dollar to 78 level may bring the Crude Oil down to $59. There is support at $74; that may prove to be fragile.

It seems that more price action is in the downward direction from here. If the Crude advances to 86 - 90 range, it will present even better risk reward on the down side!