Monday 3 September 2018

WTI OIL: end of the line?

Hi Traders,

Although the WTI OIL (now at 70.34) can still edge up a bit, it might not make it higher than 72.60 and the long awaited major downturn could set in soon. Targets: the area 68-67 followed by the supports at 64-63 and 61-60.


The weekly chart reveals that the inclination of wave 2 is perfectly identical to the inclination of wave 4 (see the gray lines) and this might be a indication that wave 4 just topped.

Previously, wave 2 topped and reversed after touching the inclination line. Similarly, wave 4 touched the inclination line at 75.34. This could be a top as well.

In addition, the top of wave 4 coincides with a major resistance (see the weekly chart

Most importantly, the daily chart clearly shows that the whole set of Elliott waves and sub-waves is religiously in place, confirming the assumption of the completion of major wave 4. See also the possible target at 72.26-72.60.


Identical inclination means that WTI OIL gained the same average dollars each week in both wave 2 and wave 4. Let's see how:

- Wave 2 lasted 99 weeks, from a low at 74.94 to a top at 112.20. Gain: 37.26
Average weekly gain: $0.37

- wave 4 lasted 128 weeks, from a low at 27.69 to a top at 75.34. Gain: 47.65
Average weekly gain: $0.37   

NOTE: W.D. Gann - and very few others later - developed studies about the interaction between a price unit ($0.37) and a time unit (1 week) in order to pinpoint time turning points

Unfortunately I don't possess the knowledge and the technology to indulge in such a time consuming study. However, I sometimes use "Time Turning Points" as further confirmation of the Elliott waves events, like the contemporary completion of major wave 4 in conjunction with a TTP.


Given that major wave 4 seems to be complete, the uptrend that started on Jan 20, 2016 appears to be over and the WTI OIL might soon head South.

weekly chart - click to enlarge

daily chart - click to enlarge

4-hours chart - click to enlarge