WTIC

WTIC , West Texas

Hamilton

wtic aug 19 2011

Oil, West Texas, has bee a good guide for the entire oil sector,together with Royal Dutch and a few others. As with the stock markets we are rapidly approaching critical technical levels. At $6 a day we may be within a day or two of the common target, the wave B level of this near perfect A-B-C. Also the RSI is at levels not seen for two or more years.

Suncor , SU, might actually be a buy at around $29 for a trade. It is obviously in the same position as the stuff itself, that is approaching the B-wave level. A bounce of $5 to $10 from there is not out of the question. Use a stop-loss as the count is not at all clear on SU;

su aug 19 2011 rds.a aug 19 2011

If Royal Dutch is a guide, we are nowhere near the bottom as it would need to drop to $50 to be in the same position as SU. Both are the largest oil concerns in their respective home countries, Canada and Holland but Royal Dutch is a lot bigger and more integrated making it less responsive to immediate changes in the price of crude. Click on the charts to enlarge.

WTIC, West Texas Oil

Hamilton

wtic aug 2011

Once oil (West Texas) had peaked around $115 a barrel, the wedge shaped structure that had propelled it there almost promised that it would come back to, at least, $84. Moreover it should do it quite rapidly. It did to about $95 and then it started oscillating for more than a month roughly around the $100 level, a nice triangle for sure. What was not clear is whether it was a B or a 4th wave triangle. It’s size, relative to the preceding drop suggested a B-wave. As in an A-B-C drop the C is often equal to the A, that gave a target of $82 or so (see black annotations). Problem is, it never got there and instead only barely flirted with the $90 level. This fit a 5-wave count much better (light blue). It also called for a return to about the level of the apex. This invariable happens with 4th wave triangles but not necessarily with B-wave triangles. The formation once again of another, much smaller, triangle more or less confirmed what was going on. The end result is that the outlook for oil is now far more bearish than it was originally. 5-waves in any direction never stand alone. We should now get at least one more set down to about $78, more likely a more prolonged move with more than just one more leg. Time will tell.

$WTIC, West Texas Oil

Hamilton

$wtic july 27 2011

West Texas did not drop to the +/- $82 level as it should. This is a pretty good hint that the count may be wrong (OIL, by the way, did). Therefore I am changing the count. Triangles only occur in either wave 4 positions or in B-waves. It was assumed that the twirling around $100 was a B-wave but given the subsequent action perhaps it was a 4th. Mid june we had another triangle at around $95 which almost certainly is a B-wave. All of this makes the outlook more bearish than before. The $82 level originally anticipated would be reached if all of this is just a large A-B-C. But we could actually go quite a bit lower if this is a much more complex correction starting with an initial 5-waves !