First post on Devon Energy [DVN]

All the energy stocks are showing similar bottoming patterns right now.  The first confirmation that the turn is official for DVN will be the re-taking of the lower rail per below.  Perhaps the throw under will head down a bit more first to the $26-$27 range before reversing back upward but that is not my primary model at this point.  The key take away is that the reversal is not confirmed until this breaks back up into the channel, preferably with some kind of gusto.  Gaps are always good for this.

I am not suggesting that anyone put money into this company or any other company that I mention in these pages.  I'm just pointing out that sectors tend to rise and fall as a herd and that many in the energy herd are putting in terminal counts right now.  The real question for 2016 is whether this current bottom is the bottom or whether it is just the "A" wave of Prechtergeddon.  Either way it really doesn't matter.  If the long term prognosis is for the entire US energy sector to collapse that is not going to stop me from gambling on a powerful retracement wave if that's what my EW model says the odds favor will happen.  The key thing to look for will be the nature of the wave.  A 3 wave move to the level of the prior 4th should be looked upon with great suspicion.

I want to point out one more time for the cheap seats that the news is pretty much all negative on energy and natural resources right now.   See Example 1 and Example 2.  So this bottoming model that I'm documenting has zero to do with the news and thus zero to do with what so many people mistakenly believe are "fundamentals". 

The true fundamentals are unknown and unknowable.  People (including company officials) go around all the time deluding themselves with fairy tales about how this or that "fundamental" will move the stock in thus or such a way but their accuracy is never very good because the company does not set the share price; the market does.  And you never know who in the market already went leveraged long on the company a year ago in bad news and is now dumping the stock into good news.  Thus, when the good news does not have a good effect on share price, those who think that news=fundamentals are taken to the cleaners.  News is not fundamentals folks.  Watching CNBC is a complete waste of time and in fact I think it is a net negative.  IMO the only thing that has any hope whatsoever of predicting future chart movements is what the herd has done in the past and the best way of interpreting those herd movements that I have ever seen is via Elliott waves.

Time will tell how this ends up going but suffice it to say that my bottoming call is 180 degrees out of line with conventional wisdom.