The then – Aug. 8 – and now charts.
There is not enough space on the left chart. If there was the vector equal arrow would hit the $26 target quite easily. In any event C should drop below A at around $30. Time will tell.
OIL
OIL, the big picture
Our longer term view is that oil could go down quite a bit further. It is, perhaps, good to remember that the stuff traded at about $11 in 1998/9, not all that long ago. We do not need to go that low, but using vector equality a target of somewhere between $25 and $35 is definitely a very real possibility. The wave C as shown above may be missing a 1-2 and a 4-5 as there may be three of different degrees.
Presently the prevailing view seems to be that oil must go up as we continue to use more and have less. This is the logic of peak oil. Perhaps alternative energy sources combined with recognition of global warming will change that view over the next few years.
Oil update and Gold
Oil traded lower overnight. It appears to have completed a wave 3 which would imply that waves 4 and 5 should follow. Then a first new 5 wave sequence, and with it a wave 1, would be complete.
Alternatively this is just a B-wave of a correction that is becoming more complex and taking more time. If so a C should follow from here back to ,say, $65. We have no idea but for the nimble trader it would be a buy here for a gain of $3 to $5.
Gold is in a similar, but slightly different, position but went down a lot further in relative terms.
The A-B-C down could be a larger B wave in a large correction. The upside in relative terms is much larger than the downside so, if anything, a long position would be more appropriate.
OIL update
Then and now;
You could easily have made $3 per barrel on this last move alone. If you like to play with a 10 lot per trade that would be $30,000 as each contract is good for 1000 barrels. Don’t forget to use stops!