You never know but this is very close to our target of about $55. RDS.B still has one or two dollars to go.
PS. It is now 7 o’clock and oil is trading with a $53 handle.
Year: 2014
RHT, RedHat update
Redhat is the company most involved with the “open source” Linux operating system. Back in 2012,at about $62, we thought it was a sell. It was initially but it came right back and made a marginal new high (for this run, once it was at about $140), so you would have simple wasted two, almost three years time. Now we have a fairly clear pattern, a diagonal or in plain English a wedge. They come at the end of the ride and we think this is the end. But before you get too carried away we would like to point out that these wedges are masters at deception and sometimes they run for longer than you would expect, as in the chart on the right. We do not expect that at all this time but just want you to be warned. The beauty of all this is that, either way, this stock should not trade above $65 and should, again in both cases, trade below or at $42. This is a very high confidence situation so your risk/reward ratio can be much lower. Choose the spot that fits your style best. If you do not have a style then just sell short at $60 or above, get out of any longs now and very definitely if the stock breaks the lower boundary line.
55 June 2015 put options are trading at $4 offered and , for some, this might be the best strategy.
RDS.B Royal Dutch update
RDS.B seems to support the notion that one more leg is needed. We are clearly in a 5th wave, 3 of 5 to be precise. The ideal target (ideal in EW terms) is around $59, that is where the triangle’s mouth would suggest that it goes as that is the lowest point. Time will tell.
OIL, the stuff, update
On the left we have the big picture, this is spot WTI the most common variety this side of the pond. It clearly shows that for some reason oil was “suspended” for a number of years, roughly between $120 and $100. An EW analysis would have called for a much earlier decline in a wave c of a large a-b-c, normally to new lows. However some resistance would be expected at the red line that connects the bottoms ( this chart is to Dec.12 and shows a price of $62.54, in reality spot was around $57. ) We are presently close or on to that line.
The chart on the left is the Jan. contract 
. Do not know how that rose got there but it looks good so I will leave it. This future trades on NYMEX which is part of the CME, Chicago Mercantile Exchange, but trades in New York. It is on the internet if you want to see this stuff almost live, www.cmegroup.com . The nearest or front contract always converges to the spot price as it matures, in this case downwards as the market is in contango. This means that if you are long the futures you systematically lose holding the position (think nat. gas etf s).
It is hard to get a clean count applied to this chart. Just looking at the tangent or slope of the curve there are two clear breaking points where the angle going down accelerates towards the vertical. Those points could be waves 2 and 4 in a 5 wave sequence. If so the drop should stop about here or perhaps just a few dollars lower, say at $55. (near the red line on the other chart). Oil would then bounce, possible for quite some time before doing a number of 4 and 5’s to correspond with the 1 and 2’s at the top. Ultimately the c wave should go below the low of a ($40 on the left chart but in reality more like $30). The bounce in the next few months could take the price back up $10 to $15 easily. In commodities the 5th wave is often extended, this is the 5th of 3 so that is a different story. In any event this 5th wave is already the longest.
PS Before you decide to trade this stuff please do not forget that each contract is good for 1000 barrels, so if you do 10 for openers you have a notional position of $570,000. Also, because the volume shown above is different from that shown on stocks, do not read anything into it. Futures always expand like an accordion and then collapse when they get close to delivery.
Elaborating on the possibility of one more dip I have found a chart of the continuous front month ( it rolls into the nearest month automatically).
Granted that counting this stuff is mostly in the eye of the beholder and therefore very subjective, it still looks to me that we have a total of 7 waves now. To complete a 5-wave sequence you need 5+ Xx4 = 9,13, 17 etc. We are missing one.