The daily oil chart as of yesterday is about to take oil to a lower handle. The 60 should be broken soon and the 55 target area reached shortly, completing a daily set of 13s (Combo and Seq), erasing the gains of the complete upwave. The weekly count for the current week is at 10, which gives room for at least two lower weekly closes, hence the final target area may be around 50. Before we should see a minor correction to the upside from the 55 levels. That is usually a $10 swing but as soon as the weekly lows are in we should see a powerful rally of roughly 40 Dollar as a 38% retracement but even more as this is an ABC pattern as the CRB has. Just a little historic reminder - in 1929 the commodities crashed as well in the same magnitude they do now.
Friday, November 7, 2008
Oil technical outlook
The daily oil chart as of yesterday is about to take oil to a lower handle. The 60 should be broken soon and the 55 target area reached shortly, completing a daily set of 13s (Combo and Seq), erasing the gains of the complete upwave. The weekly count for the current week is at 10, which gives room for at least two lower weekly closes, hence the final target area may be around 50. Before we should see a minor correction to the upside from the 55 levels. That is usually a $10 swing but as soon as the weekly lows are in we should see a powerful rally of roughly 40 Dollar as a 38% retracement but even more as this is an ABC pattern as the CRB has. Just a little historic reminder - in 1929 the commodities crashed as well in the same magnitude they do now.
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