The approved U.S. debt deal was supposed to boost oil prices -- presumably, via resuming consumer demand due to the averted debt default:
"We're watching the debt deal. That will be the first hump we need to get over to see trading volumes pick up again. Any firm indication of a debt extension is likely to spark an attack of the $100 per barrel price." (Barrons)
Well, on August 2, Congress and the White House approved a $2.4 trillion debt extension. YET, crude oil prices instead attacked the downside in a precipitous plunge that erased the entire gains for 2011.
"Fundamental" arguments like the one above can often make a difficult situation even more difficult. What was the "factor du jour" one minute ends up being "shrugged off" by the markets the next.
Elliott wave analysis, on the other hand, can give you some objectivity in your analysis.
Here, the latest Energy Specialty Service presents the following chart of crude oil with the proposed Elliott wave labeling:
Energy Specialty Service identifies oil's present decline as a smaller-degree wave iii within a larger-degree wave III. Elliotticians refer to this move as a "third-of-a-third," a pattern best described by Elliott Wave Principle -- Key To Market Behavior:
"Third waves are wonders to behold. They are strong and broad and the trend at this point is unmistakable. It follows, of course, that the third wave of a third wave will be the most volatile point of strength in any wave sequence."