Crude Oil Tanks: Is the March Peak a Distant Memory Now?

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Crude Oil Tanks: Is the March Peak a Distant Memory Now?
EWI’s Energy Specialty Service cuts through "fundamental" muck to find the Elliott wave pattern underway in crude oil

By Nico Isaac
Thu, 03 May 2012 17:15:00 ET

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UPDATE May 4, 1:23 p.m. EDT:
Today's dramatic decline in oil of nearly 5% to beneath $98/barrel answers some of the questions posed in this article. Right now, you can find out how this drop fits into the larger Elliott wave picture, and get a jump on Crude's next big move with EWI's trader-focused Energy Specialty Service >>

Or, get the bigger picture outlook for crude oil, as well as global stocks, interest rates, currencies, metals and more in the next issue of EWI's Global Market Perspective (publishes today, May 4).

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In the last 24 hours, I have seen more back-and-forth, back-and-forth action in the "fundamental" news stories regarding crude oil than on the courts of the Masters Tennis tournament.

But don’t take my word for it. The following slew of news items capture the bobble-headed nature of the fundamental game:

First, bad economic data falls on dead ears: “Oil Holds Steady Despite Negative US Jobs Report.” (Associated Press)
Then, bad economic data raises bearish fears: “Oil Tumbles As Economic Outlook Worsens.” (Reuters)

-- NEXT --

First, rising oil prices are a demand killer: “Demand Growth Compromised By High Oil Prices” (Travel Daily News International)
Then, it’s a space filler: “Air Demand Up Despite High Oil Prices” (The Independent)

-- NEXT --

First, anticipation of surging supply is bullish: “Oil ticks Up Ahead of Supply Report. Investors positioned ahead of inventory data expected to show increasing oil stockpiles.” (Wall Street Journal)
Then, its actuality is bearish: “Oil Prices See Biggest Drop In Two Weeks On Growing Supply.” (Reuters)

With "fundamental" analysis, you never really know when one factor will be holding the strings of a market’s trend one minute, only to be cast aside by that market the next.

Elliott wave analysis cuts through the muck by focusing on the internal force behind every major trend change in a financial market: social mood, which unfolds in objective Elliott wave patterns on price charts.

And, right now, EWI’s Energy Specialty Service is hot on the trail of the near-term trend underway in crude oil. The May 3, 1:56 PM, Energy Specialty Service intraday update for crude presents an Elliott wave-labeled chart of the market since its early March high. (Chart reprinted below minus Elliott wave labels).

The focus of Energy Specialty Service’s analysis is in the market’s recent performance (circled in blue.) The main two questions being:

Has the price action unfolded in 3 waves -- thus signaling a corrective price move that will be fully retraced? Or has it unfolded in 5 waves -- thus signaling an impulsive move that will see much further gains ahead?
And, what are the critical resistance and support price levels prices need to penetrate to bolster one interpretation or the other?

UPDATE May 4, 1:23 p.m. EDT: Today's dramatic decline in oil of nearly 5% to beneath $98/barrel answers some of the questions posed in this article. Right now, you can find out how this drop fits into the larger Elliott wave picture, and get a jump on Crude's next big move with EWI's trader-focused Energy Specialty Service >>

Get Ahead of the Next Big Opportunity in Oil

Learn more about the EWI service that best suits your personal needs:

Global Market Perspective: Tap into intermediate- to long-term opportunties in crude
Each 100-page issue gives you the independent perspective you need to put your finger on the pulse of every major market in the world. You'll get insightful analysis and specific forecasts for crude oil, global stocks, currencies, interest rates, gold, silver and much more. DETAILS>>

Energy Specialty Service: Comprehensive intraday and daily coverage for the active trader
Get timely and actionable forecasts for crude oil, nat gas and other global energy markets in EWI's most specialized Energy forecasting service. Discover what real-time updates and expert Elliott wave analysis can do for your trading. DETAILS>>

Tags: crude oil, Elliott wave, Elliott Wave trading, fundamental analysis

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