Oil has been in a downfall over the past several weeks, based on a variety of fundamental opinions, be it geo-strategically, cyclically or economically driven.
GEOMETRY:
Technically speaking, since mid-July 2014, price resolved itself out of a geometry following a protracted sideways defined by the A-B-C-D-E points. From July 14th to August 04th, price coiled about the lower border of that geometry, and since fell in a consistent angle with no interim rallies.
ELLIOTT WAVE: This straight, near linear fall is reminiscent of an Elliott Wave core impulsive move, typical of its internal Wave-3, thus suggesting that the prior triangle that held price into suspension over several months was likely the unfolding of a preceding Wave-1 and Wave-2.
FIBONACCI:
From a standard 1.618-Fibonacci extension, then a mere projection using Wave-1 and Wave-2 as anchors would define a possible support at:
(Wave-1 / Wave-2) x 1.618-Fib = 69.60.
This level gains credence on the basis that:
1 - It aligns with a historical support when a prior Wave-2 (grey shade to the left) offered support to a historical level via the intermediary of a Wave-3 impulse.
and
2 - It also aligns well with the predictive/forecasting model's first forecast, namely:
- TG-1 - 71.29 - 12 NOV 2014
PREDICTIVE/FORECASTING MODEL;
Looking at the entire predictive/forecasting model's targets, there are two NUMERICAL targets:
1 - TG-1 - 71.29 - 12 NOV 2014
and
2 - TG-2 - 61.37 - 12 NOV 2014,
as well as two NOMINAL targets:
1 - TG-Lo - 50.71 - 12 NOV 2014
and
2 - TG-x - 39.15 - 12 NOV 2014.
As explained in prior analyses/charts, the numerical targets offer a HIGHER probability of hit, but a lesser level of reversibility. This means that IF and ONCE hit, price will likely RETRACE in a Fibonacci order, between 0.382 and 0.618.
In contrast, the nominal targets offer a LESSER probability of hit. This means that if and once hit, price will likely REVERSE (and not just retrace) in a Fibonacci order that should exceed 0.618, and potentially attain extensions in the 1.131, 1.414, or 1.618 order.
OVERALL:
Trend is decisively bearish. Both Fibonacci measures and predictive/forecasting model have defined a nearby support level in the 69.60-to-71.29 range. However, on its own, the model suggest a potentially deeper attainment levels of diminishing probability, but increasing structural relevance.
Cheers,
David Alcindor Predictive Analysis & Forecasting Denver, Colorado - USA
Here is to hitting ALL targets, looking back at the charts from first posting ... 15 months ago:
Best,
David Alcindor
PS: Most recent chart;
Komentarz
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11 FEB 2016 - ADDENDUM:
At 1.618-Fib, price may have reached a nadir in UKOIL:
Best,
David Alcindor
Komentarz
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11 FEB 2016 - ADDENDUM #2:
Look for $17.21 being the next probable level of support if 1.618-Fib fails ... This would loosely correspond to the original USOIL's 21.02 target defined in FEB 2015:
Best,
David Alcindor
Komentarz
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01 MAY 2016 - Chart Update / Tech-Note:
As forecast, price is expected to face limited upside potential at this time, causing a reversal in the UKOIL vs. USOIL relative strength chart:
Thanks a lot for the update. The blue 1 and 2 in your last chart (addendum #2) is that a Geo being formed? Would that mean that point 3 could now have been formed just below $30 and that after a move up towards point 4 another leg down to new lows can be expected?
If the 1,618 extension now holds and oil moves up towards let's say the 'orange' area that you indicated, how would you mainly assess if it is a reversal or just a retracement? Do you mainly use the internal wave structure of the move up in combination with price action at fibonacci retracement (quant) levels?
1 - Yes, the blue outline implies a possible geometric development at this level, which would mimic the USOIL forecast - Following are the UKOIL chart from Addendum #2 and the current USOIL chart:
You will note that the correlation between the UKOIL and USOIL often illustrates a lead in the UKOIL and a subsequent compliance in USOil. I am not sure why this is occurring, and perhaps the Brent is a forward barometer of the US crude oil, but the resulting price action remains a high-correlation event.
In the US counter-part, I had drawn a geometry that remains intact. HOWEVER, Point-4 of this geometry is NEVER where most traders expect. So, I would not be surprised if price rallied to a higher level than the upper border of the geometry in order to finalize the residence of Point-4. This is a phenomenon I have observed too many times, as I dissected the Geo.
2 - The assessment of reversal versus retracement is based on the Predictive/Forecasting Model, which in this case favors lower lows. So this is clear, the Predictive/Forecasting Model is NOT based on the price action (it's a proprietary feature that I use to help define dominant trend, R/S levels, and forecast probable retracement versus reversal levels). However, once the "Model" defines a probable pathway, I use the high-probability value of the Geo to provide a visual pathway of probable price action, based on the internal anatomy of the Geo, which has a rather strict and reliable set of instructions (Google my alias: 4xForecaster and the Geo construction to access the multiple times I have defined it).
Best,
David Alcindor
plok
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Thanks David, I have indeed made a reading list of some of your previous posts. For now, have a great weekend!
4xForecaster
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11 FEB 2016 - Chart Update:
Here is to hitting ALL targets, looking back at the charts from first posting ... 15 months ago:
From Twitter/LinkedIn:
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UKOIL continues to rise to 38.2 #fibonacci mark, as forecast; Bearish Model sees limited upside:
BRENT #crudeoil
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David Alcindor