You did not know that Schlumberger is a Dutch company? Well it is, at least for tax purposes.

We are concerned that SLB suggest that oil could go down further, perhaps after a period of sideways action. From the big picture it is perfectly clear that we are looking at a “flat” that is incomplete and can still easily go to $40 or beyond. In fact it is  a classic flat without any warts at all. Therefore this C wave should unfold in a 5-wave sequence pretty well straight down. To date we can only count waves 1, 2, 3 and (part) of 4. There is still more of 4 to go and then 5. Already there is a possibility of overlap between waves 2 and 4 which should not happen. This can be explained by assuming a triangle is in the making as wave 4. In EW there is a school of thought that where overlap occurs with a triangle, it is not the extreme that counts but the value at the apex or e-wave of that triangle. Technically then there is no problem and we should expect a 5th wave at some point between now and a year from now. It is highly unlikely that this should happen without oil itself also getting hit. See also the oil blog.

This one is following our script to the dollar, stopping precisely at the first target of $55 (see previous blog). Since then it has almost completed an a-b-c correction that has taken much longer than expected but nevertheless fits the scenario to a T. This does not bode well for the outlook for oil stocks in general.

This company is in the oil equipment services business. They are dependent on the big oil companies in that they serve at their pleasure. In that sense the are a derivative of the the oil companies and should , therefore, trade in a wider range. The B-wave is clear as a bell but so far at least the stock has not moved that much. It should head for $55 for starters (RIG , Transocean, is already at the bottom but it has a few other issues). In any case , if this stock is a guide the oil sector still has a lot of trouble ahead. By the way, this one trades at a P/E of 21,; it won’t need a lot of compression to get to the first target.

Halliburton is in the same category, except that it benefits from vice-presidential interference. The chart and it’s message are the same.