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Crude Oil: How to Catch the Next Move Without Reading the News
If you know what to look for, the energy markets will often tip their hat before the news.

By Vadim Pokhlebkin
Fri, 21 Sep 2012 17:45:00 ET
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Crude oil ended the week of Sept. 17 on a bright note, although for a while things looked scary.

First came that out-of-the-blue tumble on Monday (Sept. 17) -- from near $100 to $94.65. The selloff did not stop there, and on Thursday (Sept. 20) crude fell as low as $90.96 a barrel.
But then on Friday (Sept. 21), it gained almost $3 when the price touched an intraday high of $93.84.
Predictably, the news attributed the rally to a "fundamental factor" -- namely, "central bank stimulus optimism" related to the European Central Bank's new bailout plan for Spain.
Granted, the timing of the ECB announcement did fit the timeline. Still, could you have seen the rally before the ECB had spoken?
Yes. As early as 8:39 AM on Sept. 20 -- almost a full day before the ECB made the news -- our Energy Specialty Service editor, Steven Craig, posted this intraday update for subscribers (excerpt; some Elliott wave labels erased for this article):
NYMEX Crude (Intraday)
Posted On: Sep 20 2012 8:39AM ET / Sep 20 2012 12:39PM GMT
Last Price: 91.95 (Nov)
The overnight price action looks to have fulfilled my expectations for a smaller degree fourth and fifth wave [down]. At this point, trade above the 92.47 overnight high would offer the initial hint that wave iv is complete and that wave v of (i) is underway. 
Later that same day, Steven added in his end-of-day forecast:
"I'm looking for impulsive upside price action to support the idea that the...advance is underway from today's 90.96 low."
The next morning came the rally -- and the news from the ECB.
The take-home message here is this: Energy markets will often tip their hat before the news. The market's collective psychology changes according to a pattern -- Elliott wave pattern. You just have to know what to look for. 

In this example, our Energy Specialty Service expected a rally because crude was finishing a 5-wave decline. The Elliott wave model said that a move in the opposite direction was due next.

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