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February 4, 2016 | OIL: As Good As It Gets

Joe Russo is the Publisher and Chief Market analyst for Elliott Wave Technology, and has been practicing Elliott Wave Theory and Technical Analysis of Financial Markets since 1991.

In observing the enormous triple digit percentage gains achieved amid Crude Oil’s northward thrusts versus its debilitating double digit losses during its major spills, it becomes rather clear why market participants prefer buying low in a newly forming bull market vs. selling short at the onset of a bear market.

On a relative basis, in the not too distant future, a cyclical bottom will form and the long-term trend in Crude will reverse to the upside – providing bullish speculators with yet another rare opportunity at the chance of humongous triple digit upside returns.

From an Elliott Wave perspective, the well-established secular trend dynamics in Crude Oil are rather clear. From a technical standpoint, this is as good as it gets.

Following a massive 486% run-up, and after cresting at its Cycle-Degree wave V in 2008, the sudden and devastating crash of 08’ wiped-out 75% of Crude’s value. By mid-2011, just two years later, cresting at only $114 per barrel in that go-round, Crude registered a primary degree B-wave advance north of 200% above its 2008 low of $35.35.

Thereafter, trading in a choppy sideways range through mid-2014, Crude has since succumbed to its primary C-wave decline, which has taken it down to fresh new lows and another 75% wipeout from its previous peak at $114.

Since it is impossible to pinpoint and trade the precise tops and bottoms of each key pivotal Elliott Wave reversal, the only thing to do is attempt to trade and invest in the larger trends defined therein.

These rather elusive tradable-trends are quantifiably defined by a strict and specific set of conditional criteria that mathematically pre-determine when such trend changes are most likely to take place. Far from perfect, this trading and investment strategy is also as good as it gets – bar none.

Note how this prudent and unbiased investment strategy has automatically established both long and short positions, which are illustrated directly on the price bars over the last two years.

Also, note the resultant marginal losses and juicy percentage gains reflected in the lower month-to-date equity panel. The most recent short position established July 6, 2014 from a price of $56.42, as of the close on February 2, 2016 – is sporting another juicy gain north of 47%.

If you haven’t noticed, we’ve pretty much stopped writing articles about the markets.  Quite honestly it becomes rather tedious and redundant to restate the obvious over-and-over again.

After a decade of missives, we’ve pretty much said all that we have to say on just about every topic related to the financial markets, Elliott Wave Theory, investment strategies, and technical analysis.

On occasion, when inspired as we were with these Crude Oil charts, we’ll certainly roll up our sleeves and share our current viewpoints.  Beyond that, you can find our work readily available by subscription on a daily basis at Elliott Wave Technology.

The charts and strategies illustrated above are standard everyday fare for us.  We’ve been doing this for decades, and have a record of each and every trade – win, lose or draw.

If you would like some assistance within this realm whether it is investing in ETF’s for the long-haul, trading the “FANGS,” or trading futures, we have two very user-friendly options you may wish to consider.

  • The Long-Term Trend Monitor provides users with unbiased long-term position guidance, and has an outstanding record of successfully navigating long-term market trends.
  • The Chart-Cast Pilot does the same – and then some, offering navigational guidance over the short and medium term as well.

Do let us know if you have any questions or require further assistance.

Until Our Next Inspiring Moment,

Trade Better / Invest Smarter

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February 4th, 2016

Posted In: Elliott Wave Technology

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