Monday, March 23, 2015

Important post on [USO] with implications on all commodities

Here is the backlink and the first chart below is the model from that link.


All commodities have had a big bounce of late and people on TV are starting to talk about it.  But I just don't see a completed wave count to the down side so either that completes or we are likely going into some larger sideways movement like a big 4th wave HT perhaps.  For now, the chart seems to have followed the green path above.  We could still get a bit of a larger throw over on this tomorrow but when I zoom way in I can see a count that says red E and thus green 4 are both finished.  A breakdown through the lower rail is the first confirmation that this is playing out.  A break out above the orange horizontal means that something else is happening, perhaps the large grey HT as described below.  I am watching that possibility closely because of the strange formation of blue 4.  It was a valid 4th wave HT but it was unusual nonetheless and so perhaps it is telling us that the finish will be choppy as well.

If this begins to break down the small 4th wave HT (labeled green 4) and follows my primary model in red then it would be the end of a very clear 5 wave down motive move not only in the 60 minute chart shown above but also at one degree larger in the 360 minute chart shown below.  Interestingly, if this were to occur then blue 5 would have the same length as blue 1 which is expected since blue 3 is extended.  I suspect that if oil pulls back like this then gold and silver will also pull back as well but of course their charts go in and out of phase with oil over time so their charts need to be reviewed separately.

Having said that, it could also morph into a 4th wave HT as shown buy the grey lines in the 60 minute chart above.  In this case I would expect 3 small waves down that stop at perhaps red D in the model above and then reverse sharply to kiss the top down sloping grey rail.  If you look carefully you can see I have drawn a potential path for this in grey as it does the 5 rail bounces only to end at about the same level as green 5 within the circle.

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