Ichimoku & Elliott Wave : How far is Crude Oil going? After balancing out at 50, crude oil has slowing been going down. Initially, the downward movement was a pull back but now people are thinking the bullish momentum has turned into a bearish momentum. Has it? Are we in a bearish trend? Is this a pull back for a bullish trend?
Let’s look at the charts to determine what is going on with crude oil.
Yesterday, we started the “journey” of showing the power of Ichimoku compared to Elliott Wave and Fibonacci. We will continue this journey and analyze crude oil based on both systems.
If you didn’t see the video we posted yesterday in regards to Ichimoku vs Elliott Wave. Here it is….
Below is the monthly chart of Crude Oil futures provided by eSignal with Ichimoku and Elliott Wave. Elliott Wave has a bearish trend with the Elliott Wave 3 formed with a possibility of a Elliott Wave 4 bullish pull back occurring. The Wave 4 would be around either 57 (50% Fib) or 66.75 (61.8%). If price doesn’t get to these pull back levels and decides to retest the low then the Elliott Wave Counts will redraw and the Wave 3 will continue to occur.
With Ichimoku, the monthly time frame is in a strong bearish trend. The minor resistance at 38.79 was broken. The major resistance is at 66.89 but with momentum very strong, it has a low probability of reaching this level. Instead, it will have a high probability of reaching a lower time frame resistance which is between the monthly green and red line.
Below is the weekly time frame. With Elliott Wave, we are in a Bullish wave pattern with Wave 4 being formed. The levels for the Wave 4 are 41.93(50%) and 39.64(61.8%). Right now, we are below the 50% value but this is a weekly chart so we have to see where price closes. If price closes below this level then it will have a high probability of reaching the 39.64 level. Note, when price was going up to form Wave 3, notice the various number 3 on the chart. These are the different Fib levels. It was hard to determine where Wave 3 was going to end and Wave 4 would start.
With Ichimoku, price pull back from the bearish trend to the major pull back level at around 50.00. This was the top of the cloud cloud. This was the critical point for the bearish trend to continue or a consolidation or a bullish trend to occur. With the major pull back resistance holding and price going down, the bearish trend is continuing. It now has a high probability of reaching the support at 38.79. This is the same support at the monthly time frame. As a result, this is a iMTF™ support. Price will have a high probability of holding this value once it arrives unless the Ichimoku lines move since it took too long to reach this value.
Below is the daily time frame. With Elliott Wave, it is a bearish wave with Wave 3 still being formed. The #3 on the charts show the various levels that price can reach to form Wave 3. Price is at one possibility. If it breaks this support then the next support for Wave 3 will be around 35.00.
With Ichimoku, It is a bearish trend going to the weekly/monthly support of 38.74. The green line with buffer is the “trailing stop”.
Timing elements indicate a high probability of reaching this value August 4. For the last 4 years, Crude oil has gone up in the month of August 3.6% in an ugly consolidation pattern i.e. big draw downs.
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