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Watching markets collapse is the most fun you can have with your clothes on……….and there’s no blogger out there who’s been more consistently bearish on energy than little old me. Here’s what the front month of crude oil looks like shortly into Sunday’s trading (who knows where it will be by the opening bell, of course……..)
I don’t think there’s been a blogger roaming the streets of Palo Alto more bearish on crude oil than me, and to date, that has worked well. Cramer famously announced a few weeks back that oil’s price “smells like a bottom” (which, again, is the kind of olfactory proclamation that passes for analysis, versus my carefully-crafted charts). I personally think the prospects for energy smell more like Cramer’s own bottom, but we shan’t explore the topic further.
Oil broke below support today but managed to close back above it. Key support for oil is at 48.46. What makes this level important is that it is the base of the descending triangle that has formed. It is make or break time for this pattern, as oil nears the sweet spot of this pattern. The key levels to watch now are the 50.15 level and the 48.46 level. A break above 50.15 voids this pattern. While a break below 48.46 and more importantly a close below it, confirms that pattern. The descending triangle provides a potential move of about -10% if it was to break. This would send oil down $44. Keep an eye out because if Oil sells off it just might be that catalyst that gets this market to sell off further. This pattern is also seen in USO. (Click on either chart for larger version): (more…)
The refiners are now looking very good for lower supports of wave 4 of (iii) in MPC & VLO, and wave (ii) in HFC (maybe one more low to 36s
TSO does not have as nice a chart with clear targets, but the 15min there shows a much cleaner abc down completing.
I think they should all run together again.
From Zac Mannes, originally posted on ElliottWaveTrader.net.
