Way of the $WTIC

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Way of the $US and Others paddy 2 1 03-Nov-08 12:23 am

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paddy

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Monday, August 04, 2008 - 10:04 am:

This thread can be used to discuss all aspects of Oil.

This post deals with the present status of the $WTIC [ West Texas Intermediate Crude]
Month Data $WTIC

6 / 30 --------------7 / 31

===================== H=147.27

H=143.67

==================== O=140.18
O=140.00
C=127.63
===================== C=124.08
L=121.61

===================== L=120.42

The above numbers describe the Open-High_Low-Close for the candlesticks formed in the months of June - July $WTIC chart . This pattern is an "Outside Reversal" and that it has occurred in the monthly chart suggests that there is going to be much, perhaps severe, more to the downside correction . The candlestick doesn't give any guidance to how much downside just that a strong reversal is in the works..

This is perhaps given more credence by the formation of a possible Head & Shoulders pattern in the Daily $WTIC chart. . If this pattern is completed then the potential downside Target will be $93 give or take a dollar or two.

So we turn to Fibonacci levels. I know many of you scoff at them. Perhaps that is because you haven't taken the time to investigate . That aside, we'll see where the F0.382, F0.5 and the F0.618 levels are for the correction that is presently underway .

For the High the value of $147.27 was used with Lows of $49.0[Medium Term] and $96.72 [Short Term] used to calculate the various Fibonacci Levels.

Fibonacci Level Short Term Medium Term

F 0.382 127.96 110.46

F 0.500 122 .00 98.90

F 0.618 116.03 87.34

At present the correction to $125.10 in the WTIC from $147.27 is 22.8% Medium Term and 43.9% Short Term. With a Close below $127.96 we should see a test of $122 . However perhaps before that occurs we will see a bit more upside - say to the $127 - $128 level to continue developing the Right Shoulder in the Daily Chart .

Going to the Weekly Chart we can see that a Triangle has been developed . The downside Target from this pattern is $94.

Based on the data the $WTIC should eventually test the $94 - $93 level in this correction.

However this analysis can be thrown aside with one or several events occurring - major hurricane[s] taking out production facilities in the Gulf of Mexico ; terrorists destroying production supply line in Nigeria or the sinking of one or two super tankers .

The other thing to consider is that this correction might generate a bear market rally that would FAIL when the oil price correction was completed and the reversal was accompanied by a rapid rise in price with the continuance of the bull rally in oil . This could be when the Major Fall occurs in the Markets.

Paddy

paddy

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Tuesday, August 05, 2008 - 05:44 am:

$WTIC August 4,2009

Like a yo-yo . The price reached a High of $126.35 and a Low of $119.50 . Close was at $121.41 - down $3.69

Should now be set up for test down towards $116 barring any GRIM news that would send the price soaring.

Paddy

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paddy

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Saturday, August 09, 2008 - 02:07 am:

From a short term Fibonacci viewpoint the $WTIC index is now below the F0.618 Level of $116.27 . With a Close below this Level the next Target levels are $110.46 and $108.80.

The Dow is continuing with the "crude" rally . Will be interesting to see how strong "rally" is when correction in oil is completed.

If price of oil drops below $110.46 it will probably be a "spike" event and signal the reversal of the correction.

That is how I see it . Of course a big hurricane threatening Neptune and other facilities would stop the correction right quick.

Paddy

(Message edited by paddy on August 09, 2008)

paddy

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Saturday, August 09, 2008 - 06:19 am:

NYMEX Crude Oil (Light) (Globex)

Sep 08

Open -- High -- Low -- Last -- Time -- Sett

119.90--120.08--114.80--114.99 --Aug 08,15:02 -- 115.20

Chg ----Previous Settlement

-4.82 ----120.02

Barring any hurricanes or other disrupting influences the price of oil [ $WTIC }is headed for a test of 110.46 . If that fails then 108.65 - 98.90 - 96.72. Can correct back to 87.34 and still be in an upward trend.

At time of writing price @ 114.83

Paddy

coyotte

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Saturday, August 09, 2008 - 07:46 am:

paddy

if this is a EW ABC correction which would be normal after having peaked at Wave5 ($148) and not a 5Wave correction --- one would expect the following :

1:As Wave5 to A (148 to 120 ) was 28
2:As B to Wave5 (148 to 128 ) was 20

3:Projected C = (128 - 20) = 108

failing to reach 108 would be bullish -- breaching bearish
the breaching of 108 could indicate a 5wave correction was in play.

will be interesting to see how it plays out

cheers

This too shall change. (16th verse Tao Te Ching )

paddy

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Sunday, August 10, 2008 - 04:35 am:

Coyotte: Thanks for your input. Myself I've never gotten into EW analysis. There seems to be too many interpretations: If this happens then our count needs to be adjusted . Perhaps one day I'll take a crack at fathoming them .

I think you are going to see "bearish" conditions encountered with your wave analysis. Interesting that your "line in the sand" is also a Short Term Fib 0.7 level. Watch out for a "wave" to wipe out the "line". Here is why I believe it will happen.

My "mirage" H&S pattern gives a downside Target of 96±.

:::Neckline 121 - MT Fib 0.382 : 110.46 - H&S target : 96±

---------------

By the Fibs, with a Close of 115.20, the next downside Target is 110.46. Now there are a couple of intermediate levels that may slow the descent to your critical value.

These are : 113.42 -- 112.14 -- 111.65 -- 110.46 --108.80 .When the chart gets down to that level I'll post the remainder of the levels.

Of course you realize that a hurricane or terrorist act can wipe out all this analysis. We have Turkey with a "human error" and then supposedly the Russians trying to bomb the same pipeline in Georgia. Perhaps somebody wants a reversal this week and a big one.

Regards,

Paddy

paddy

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Monday, August 11, 2008 - 08:33 am:

NYMEX Crude Oil (Light) (Globex)

An adaptation of the song going through the minds of oil traders:

"No peace, no peace .....
Keeps Georgia on my mind"

Sep 08

Open --- High --- Low ---- Last ----- Time -

115.20--116.39--115.20-- 115.72 --Aug 10,18:00

paddy

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Tuesday, August 19, 2008 - 11:23 pm:

Lots of time left today but if we get a Close below $111.65 then a Test will be set up for $110.46 .

Low has been $111.64 with price just back up to $112.35 .

Paddy

coyotte

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Thursday, August 21, 2008 - 09:16 am:

looks like we had several "tests" last week along with a "shakeout" last Friday

If supplies dried up ??? -- which it would appear to have, we are now looking for a "test" of the low 3 weeks ago at around the 120 mark -- need to break this level with a bit of conviction .

This too shall change. (16th verse Tao Te Ching )

paddy

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Thursday, August 21, 2008 - 01:42 pm:

Coyotte : By my numbers, there are two upside levels to watch:

..................118.60 and 120.00

As long as 120 is not broken with a Close to the Upside then the price will reverse and continue with the downside correction.

Paddy

coyotte

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Thursday, August 21, 2008 - 06:10 pm:

Paddy:

the point is though that it never reached 108 --- hence it it would appear to be a ABC count and not a 5wave count -- the 5wave count could still come in BUT that would mean Wave 3 is not as yet complete -- on this basis the Oilers should be Traded LONG until proven otherwise by not taking out 120

all to their own poison though

cheers

This too shall change. (16th verse Tao Te Ching )

paddy

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Friday, August 22, 2008 - 01:55 am:

Coyotte: Hell between Goldman Sachs, OPEC, Russia-Georgia, Venezuela,for starters, one could perhaps think that maybe there might be a slight bit of manipulation with the price of oil.

Like get on the train because GS says it is going to $149 and OPEC will back that UP . Venezuela won't object either!

I may be wrong on this one but the month still has a ways to go.

PS How about a chart of your EW's?

Regards,

Paddy

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Friday, August 22, 2008 - 04:04 am:

FROM CNN :

NEW YORK (AP) -- Oil prices shot up $6 a barrel Thursday, rising to the highest level in two weeks as escalating tensions with Russia stoked fears of a disruption of energy shipments to Western countries.

°°° Oil price jumps above $121 a barrel

°°° Crude's rally mimicked the wild price swings seen last month and have at least temporarily halted oil's slide back toward $100 a barrel. A weaker U.S. dollar and worries about tightening output from OPEC countries are also supporting prices.

Tensions with Russia about a deal between Washington and Poland to install a missile defense system in Eastern Europe -- seen as a threat by Moscow -- and the continued presence of Russia in Georgia contributed greatly to the bullish mood.

Light, sweet crude for October delivery jumped $6 to $121.56 a barrel on the New York Mercantile Exchange.

"The sellers are backing away for now," said Jim Ritterbusch, .... "If military activity heats up again, pipeline flows into Europe could be disrupted and that would affected the United States as well."

°°° Gasoline inventories shrank by a larger-than-expected 6.2 million barrels

°°° distillate inventories -- which include heating oil and diesel fuel -- rose by less than expected, the EIA said.

That was enough to offset a hefty 9.4 million barrel rise in U.S. crude stocks last week when the average analyst forecast had been for a 1.7 million barrel increase, according to energy information provider Platts

coyotte

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Friday, August 22, 2008 - 07:05 am:

$wtic.pdf (43.0 k)

paddy :
my count and reasons as requested

I only use EW as a overall guide as to counter trend direction
and do not use it for targets

cheers

This too shall change. (16th verse Tao Te Ching )

paddy

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Saturday, August 23, 2008 - 03:41 am:

Coyotte : Thanks for the EW chart. I assume that the interpretation needs to be revised as 120 was not broken. Is that a correct assumption?

In my opinion, I think that the "speculators" trades are influenced by Fibonacci Levels. Should be fairly straight forward to include the Fib levels in a trading program. With them making more that $500,000 in one day they could hire many programmers to fine tune some automatic trading systems. Something to consider .

As I see it :

°°° On 8/21 the Fib Levels 122.03 and 122.31 stopped the "dead rat" rally cold at 122.04 .

°°° 8/21 : With Close @ 121.18 - downward correction still in place

°°° For 8/22 : If the Close is below 117.60 then 116 - 115.90 is next downside target

That is if the "gnomes of Switzerland" hold off meddling for a day or so.

Regards,[SALWTG]

Paddy

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Saturday, August 23, 2008 - 06:56 am:

Coyotte : Guess someone decided to put it to Goldman Sachs .

8/22/2008 $WTIC

Close: 114.59

Downside Targets :

113.42 - 112.14 - 110.46 - 109.81 - 108.80 - 106.03

Probable scenario for Monday - another "dead rat" oil rally with a big Down day for the Dow.

Regards,

Paddy

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Tuesday, August 26, 2008 - 07:13 am:

Today the WTIC gave us a few "dead rat" wiggles between 113.68 and 116.06 . These, in part, greatly assisted the Dow on its Way Down. There are many external influences on the price . Levels to watch are :

116.03 - 115.93 - [ 115.11 ] - 113.42 - 112.04 - 111.65

Got close to testing 113.42 - perhaps on the next shift.

coyotte

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Thursday, August 28, 2008 - 06:56 am:

possible EW Minor wave count

as noted prior 108 was not taken out

if the low of "C " is not taken out very soon then Minor W3 has probably started --- if so then the Low of W4 should not take out the High of W1

This too shall change. (16th verse Tao Te Ching )

paddy

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Thursday, August 28, 2008 - 07:42 am:

Thanks Coyotte . If you wave count is correct the

Gustavian W3 will be much greater than 122.64 and the correction W4 will be greater than 122.64.

Is there a theoretical upper limit for W3?

Going to be interesting with a long weekend .

Regards,

Paddy

coyotte

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Thursday, August 28, 2008 - 08:41 am:

paddy

Adv-GET attempts to put a projected wave price area -- but with commodities it's usually way out.

some use a "andrew's pitchfork " from W1 base
or just as you do, use the Fibs

this count is not from Adv-GET as i do not have the data for the WTIC to input.

this is only a possible wave count -- EW can only be used if the chart is trending and a count is actually present --- in this case it would appear so at this point in time

cheers

This too shall change. (16th verse Tao Te Ching )

paddy

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Friday, August 29, 2008 - 04:43 pm:

From August 28 11 PM NHC Discussion :

"THE INTENSITY FORECAST IS INCREASED OVER THE PREVIOUS FORECAST IN BEST AGREEMENT WITH THE GFDL. HOWEVER...IT WOULD BE NO SURPRISE IF RAPID INTENSIFICATION OCCURRED AND GUSTAV BECAME A CATEGORY 4 OR 5 HURRICANE BY 72 HR."

Going by that Gustav could be a very major hurricane as it approaches the oil platform / production facilities on Sunday night.

---------------Gustav 2 AM 8/29/2008

-------

paddy

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Saturday, August 30, 2008 - 10:33 pm:

Gustavo will arrive with Gusto. latest from NHC:

DATA FROM AN AIR FORCE RECONNAISSANCE AIRCRAFT INDICATE THAT MAXIMUM SUSTAINED WINDS HAVE CONTINUED TO INCREASE AND ARE NOW NEAR 120 MPH...195 KM/HR...WITH HIGHER GUSTS. GUSTAV IS A DANGEROUS CATEGORY THREE HURRICANE ON THE SAFFIR-SIMPSON HURRICANE SCALE.

GUSTAV IS EXPECTED TO PASS OVER WESTERN CUBA AS A MAJOR
HURRICANE...AND COULD REACH CATEGORY FOUR STATUS BEFORE MAKING LANDFALL THERE.

ADDITIONAL STRENGTHENING IS POSSIBLE OVER THE SOUTHERN GULF OF MEXICO.

GUSTAV IS A LARGE TROPICAL CYCLONE. HURRICANE FORCE WINDS EXTEND OUTWARD UP TO 60 MILES...95 KM...FROM THE CENTER...AND TROPICAL STORM FORCE WINDS EXTEND OUTWARD UP TO 160 MILES...260 KM.

THE MINIMUM CENTRAL PRESSURE BASED ON REPORTS FROM BOTH AIR FORCE AND NOAA RECONNAISSANCE AIRCRAFT IS 955 MB...28.20 INCHES.}

---------------GUSTAV

Latest Track prediction for GUSTAV

paddy

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Tuesday, September 02, 2008 - 03:50 am:

GUSTAV did not live up to prediction of Cat 4 . Hit shore as Cat 2 hurricane. So far no reports of serious damage and lots of reporting that the government will use SOR to fill any gaps in production. All news for a downside "rally".

Oct 08 [ CL V8 ] on Globex down $4.57 . Presently at $110.89 .

Close below $110.46 will set up test of $108.80

Regards,

Paddy

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Tuesday, September 02, 2008 - 10:47 pm:

Would appear that Fibs are guiding the way down for oil .

With a Low of $105.46 I expect to see a Test of $04.68 or $104.19 .

Made a big move in right direction. Got a lot closer to Target of $96 .

Fibs don't Lie

Paddy

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Wednesday, September 03, 2008 - 07:08 am:

$WTIC appears to have weathered GUSTAV but Putin may be putting the pressure on the price .

Putin aside, the $WTIC tested a Fib levels of 110.46 - 108.80 and 106.04 when it dropped to 105.46. The Level @ 106.04 was where one could expect a bounce . Would appear that is in the process of happening. Settlement was @ $109.71 so there should be an upside movement to test 110.46 - 111.65 - 112.14.

Putin may just make sure it happens:

" Russian Prime Minister Vladimir Putin says it is weighing its options following the arrival of more NATO vessels in the Black Sea, according to reports."

Regards,

Paddy

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Friday, September 05, 2008 - 06:46 am:

Well the gnomes might just let tis correction get completed. A Close for the session below $108.80, by my numbers, at $107.89 has set up a test of $106.03. When that falls by the wayside $101.32 and $101.09 will be all that is left before $100 will be tested to the downside.

Regards,

Paddy

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Saturday, September 06, 2008 - 11:57 am:

FWIW three hurricanes are shown approaching SE USA on the website <http://www.nhc.noaa.gov/index.shtml> but no premium priced into the oil price just yet. Hanna missed the Gulf, IKE is still too far away to be sure the Gulf is the target, and Josephine is a toy - off the radar.

The oil chart does not look attractive ATM with price action below the 200D_MA and some indicators heading towards oversold territory.

Is there any correlation between WTIC and the markets in general? I guess if oil spikes higher the SPX & INDU will spike lower ~ but both these indexes have been bumping their heads on Jan & March resistance: which suggests a lower excursion before looking more +ve IMO.The charts below support this thesis:

Tracking current hurricanes: List not long and distinguished but sooner or later some damage is likely to Gulf assets (unfortunately for life & limb)

Three amegios

IKE's estimated track: Seems to have its sights set on Gulf at present

IKE's track

WTIC daily chart: Looking O'sold? ~ slow sto presently turning?...

WTIC_Daily

INDU: Bear flag forming? Dont like the MACD crosses (of signal line/s and zero lines) - looks like one last dip is in order

indu

It is getting boring sitting on one's hands but this market ain't much fun ~ unless you are glued to the screen IMO (oh the Luxury of that)....

Happy trading DYOR

paddy

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Sunday, September 07, 2008 - 11:52 pm:

tryhay : Glad this service is back up and running . Haven't been able to access until today. Was only IC forum - maybe they didn't want any "realistic" bad news posted .

The fall of the $WTIC may get delayed by IKE. Still too early to guess as to what strength he will be after visiting Cuba. Still if he becomes a major hurricane after entering the Gulf we could see a spike back up towards $122. Here is an assessment of chart by others. I have lower target .

Regards,

Paddy

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Wednesday, September 10, 2008 - 05:46 am:

$WTIC Closed below $103.32 at $103.26 .

Has been as Low as $101.85 .

Next Target, by my numbers, is $101.33, then $101.09 and then sub $100.

Regards,

Paddy

(Message edited by paddy on September 10, 2008)

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Wednesday, September 10, 2008 - 12:45 pm:

OPEC says time to try and manipulate the price of Oil

HONG KONG (MarketWatch) -- OPEC members have agreed to roll back oil production to quotas agreed in September 2007, a level that will cut output by about 500,000 barrels a day. An OPEC statement issued at the conclusion of its meeting Wednesday said the organization agreed to produce 28.8 million barrels a day. An Associated Press report cited OPEC President Chakib Khelil as saying the quota meant that member countries agreed cut back production by 530,000 barrels a per day.

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Friday, September 12, 2008 - 05:55 am:

Sub $100 it's a Coming Soon

$WTIC Closed today at $100.87 . No more Fib levels until

$98.90 - $98.04 and then $96.72.

Regards,

Paddy

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Friday, September 12, 2008 - 09:10 pm:

paddy wrote on Friday, September 12, 2008 - 05:55 am:
Sub $100 it's a Coming Soon

Looks like some heavy duty support coming to the rescue right about now, plus IKE carving a sway right through the oil state (if it sticks to the estimate/s) and OPEC doing its darnist on the production stakes.

Recent Ike 5-Day Track Forecast Cone: Looks to be heading in the right (I mean wrong) direction

ike

WTIC chart: Looks like o'sold and divergence occurring ~ but cant see $125 being beaten in the short term....

wtic

Not to mention the strong market/s action (volatility par excelance) ~ getting ready to top up the short shorts ...

Happy trading DYOR

paddy

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Monday, September 15, 2008 - 02:27 am:

Coyotte / Tryhay :

Would you believe it - that "mirage" H&S [ Aug 4th] is getting close to reality. Modified on 10th to T= $96±.

$WTIC has broken down through $100. Words of the CRDs appear to have had no affect on price as well as IKE - need a category 4 or 5 to do real damage to the Gulf oil facilities.

Low so far $98.84 . Next level $98.04 and THEN $96.72.

With a bit of luck - like no interference from CRDs or the Feds we'll get there .

Regards,

Paddy

(Message edited by paddy on September 15, 2008)

(Message edited by paddy on September 15, 2008)

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Monday, September 15, 2008 - 11:03 pm:

$WTIC Mirage H&S Target Achieved

With Low of $94.13 the objective determined from the chart pattern has been achieved . Now looks like we can have more downside :

With a Close below 96.15 the next levels are :

-------- 93.10 - 87.34

Regards,

Paddy

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Tuesday, September 16, 2008 - 05:42 am:

Well by my numbers with a Close / Settlement at $95.71 there should be a test of Support at $93.10 . If that fails then $87.34 will be tested.

Regards,

Paddy

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Tuesday, September 16, 2008 - 01:17 pm:

$WTIC - Now at $91.80 - Low so far $91.56 . Looking for

test of $87.34 . If that fails then $80.17 will be the

Target.

Regards,

Paddy

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Thursday, September 18, 2008 - 04:45 am:

It would appear that the CRDs & the gnomes have decided that enough is enough and that there will be no more downside. a Close above 93.70 will suggest that a reversal is underway . Above 95.68 or better 97.28 would indicate that there is a "rally" underway. Above 97.28 [ High so far this session has been 97.45] the next level 98.87.

Wait for the settlement

Paddy

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Thursday, September 18, 2008 - 06:21 am:

a Rally - How Far?

$WTIC settlement was $97.16 . Now up $6.65 off recent Low . Next upside target, by my numbers, is $98.87.

Regards,

Paddy

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Friday, September 19, 2008 - 06:21 am:

Bit of volatility but still slowly inching upward. With Settlement @ $97.88 the next upside target level is $98.87 and then $100.85 .

Regards,

Paddy

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Saturday, September 20, 2008 - 06:06 am:

It would appear that the CRD's are wasting no time in recovering "Lost $'s " from their bank vaults. The $WTIC Settlement today was $104.55 . By my numbers the next upside target is $106.03 and ultimately $112.43 in this continued ascent from a Low of $90.51.

Regards

Paddy

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Tuesday, September 23, 2008 - 12:30 am:

Appears that the $WTIC is headed 'north" . High this session has been $109.00 . Presently at $107.82 . A Close above $107.25 brings the levels :

------- 108.24 - 109.23 into play . A Close above $109.23 should bring about a test of $112.43

Regards,

Paddy

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Tuesday, September 23, 2008 - 03:23 am:

The $WTIC has been somewhat volatile . In this session it has hit a High of $112.45
and then retreated to $109.88.

By my numbers, $112.43 is a 38.2% rise from the recent Low of $90.51 .

Now at $110.59 so we wait to see if there will be another attempt to break above $112.43 .

I'm sure the CRD's are very happy with this action.

Regards,

Paddy

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Tuesday, September 23, 2008 - 04:15 am:

Extremely volatile describes the action of the $WTIC. At the rate it is rising it may test $119.20 in this session. If it Closes above $116.01 then $119.20 will be tested . very possible as the High for the session, so far, is $118.64 .

Now at $115.60 .

PS $119.20 represents a 50% retracement from the Low of $90.51 .

Update : Just posted that $119.20 is now the High of the session.

Regards,

Paddy

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Tuesday, September 23, 2008 - 04:31 am:

Oil soars above $116 as traders weigh bailout plan
October crude hits daily price-move limit, spurring brief halt to trading

Trading was halted for five minutes after the October crude contract reached the limit of $10 per barrel for daily price movement. Under trading rules, the price-change limit is increased by another $10.
Crude for October delivery touched a high of $116.56 per barrel in electronic trading on Globex. That's the highest intraday price since Aug. 29. At last check, the contract was up $11.77, or 11%, at $116.32.
The contract expires on the New York Mercantile Exchange at the end of trading Monday, a factor that likely increased volatility. The November crude contract was last up $7 at $109.75 on Nymex and up $6.82 at $109.57 on Globex.
"The hundreds of billions of dollars being pumped into the system is inherently inflationary," said Sean Brodrick, a natural resources analyst at MoneyandMarkets.com. "That, plus a belief that the federal bailout will boost the economy in the fourth quarter, is putting a floor under oil prices."
"Also, a lot of commercial users of oil have been holding off on purchases as they waited to see how low oil would go," he said in emailed comments. "Now they're buying, to lock in prices for the winter."
The Bush administration is urging speedy passage of its $700 billion proposal in Congress, but Democratic leaders are countering with oversight and additional measures that could complicate efforts for a swift rescue being implemented.
"Many are hoping that the plans, which still have to be passed by Congress, will help stabilize financial markets and rescue the U.S. economy from further gloom, thus supporting U.S. oil demand growth," said Michael Davies, analyst at Sucden Research, in a note.
"However, these plans are certainly not guaranteed to stop the chaos in financial markets and the longer-term impact of recent events on the U.S. and world economy may not even start to be felt for some time," Davies said. ...........

http://www.marketwatch.com/news/story/oil-soars-spurs-trading-halt/story.aspx?gu id=%7B349F9AFD%2DB941%2D4159%2DAD11%2DD333C9EC1B24%7D

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Tuesday, September 23, 2008 - 04:44 am:

Oil Accelerates, Rocketing to $130 a Barrel

Crude futures leaped as much as $25 per barrel, or 24.3%, shortly before the New York close Monday, to tap a high of $130 per barrel. They're poised to score their biggest daily gain since 1984 -- when crude began trading on the New York Mercantile Exchange. October crude was last up $19, or 18.2%, at $123.55 per barrel on Globex.

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Tuesday, September 23, 2008 - 05:01 am:

Talk About a Rally !

Price as High as $130.00

Presently trading at $122.60

Is oil headed back to $150 or $200 ?

Immediate targets : 123.38 - 125.97 - 129.17 - 131.15 - 134.35

Won't be surprised to see them taken out before end of session !

Regards,

Paddy

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Wednesday, September 24, 2008 - 10:03 am:

ONN.tv's Mark2Market Interviews Phil Flynn About Spike in Expiring Oil Futures

CHICAGO, Sep 23, 2008 (BUSINESS WIRE) -- Mark2Market, the new ONN.tv channel dedicated to futures and currencies news, today aired an interview with Phil Flynn, FOX Business Network energy and commodity analyst, on the "Energy and Commodities" program.
Direct from the CME/CBOT trading floor, Mark2Market host Kevin Cook asks Phil about October oil futures, which drove $25 higher to $130 at one point yesterday amid short-covering activity.
Flynn describes this short-squeeze reaction as typical of commodity markets on the final day of trading, and does not call for new regulations limiting the role of speculators. In fact, Flynn observes, speculators may have been among those most negatively impacted by the spike in prices, as they scrambled to exit short positions to avoid having to deliver the physical product.
The October oil contract finished the session up 16% at $120.92, on volume of only 16,000. Meanwhile, the November contract rose just 6.4% to $109.37, with volume of over 200,000. Primary participants in the oil futures markets - large natural hedgers such as refineries and transportation companies - could benefit from such market activity by rolling their short positions to a higher pricing level.
Flynn and Cook also discussed the effect of the U.S. government banking bailout on the fate of the dollar and how this uncertainty is being reflected across asset classes, from gold and oil to the Euro currency.

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Wednesday, September 24, 2008 - 10:21 am:

Rudy : Here is the Daily chart showing yesterdays short squeeze . Is that eliminated from other Daily charts ? If so, then "poli rallies" should be banned.

Regards,

Paddy

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Sunday, September 28, 2008 - 05:54 am:

Will the Real $WTIC Chart Please Stand Up

On September 22 the price rise in the October west Texas Light Crude has been suggested to be the action of a short squeeze or Market manipulation . What puzzles me is the price action for the last day of the October contract is not included in the continuous charts.

Consider this : From 7 / 17 to 8 / 17 the "price' sub-paralleled the Lower Bollinger Band . Then on the 18th the price started to rise rapidly heading for the Upper Bollinger Band. The price action, though volatile,[ see Chart One ] was no different than similar actions in other charts.

----------------------Chart One - Daily Oct 08 $WTIC

---------

For example, although a reverse situation, the Weekly [ 8/17/2007] $INDU chart shows a downward spike to touch the Lower Bollinger Band . The Index Opened at 13328, dropped 810 points to 12518. Then it finished the week with a rebound to 13079. This set up the chart for its climb to a High of 14198 in the week of 10/12/2007 . The candlestick for the week 9/19/2008 had a spike of 957 points. It wasn't needed so may have been start of "panic" that the PPT halted- for now. [ See Chart Two ] Manipulation or just normal course of events in travels between Bollinger Bands ?

-------------------Chart Two - Weekly $INDU

This coming week should give us the answer which I believe is that on the 22nd September the price action satisfied the "touching" / testing of the Upper Bollinger Band of the $WTIC Index and also the Upper band of a down-sloping ? expanding channel. This coming week the Lower Band will be between $84 and $82 . Fits well with Colin's initial target of $85. If correct then the Daily Continuous Chart could be considered misleading as one might say " It must be going up to the Upper Bollinger Band as the price is above the Middle Band. [see Chart Three ]

-------------------Chart Three -$WTIC Continuous Contract

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Monday, September 29, 2008 - 11:25 pm:

I think I will stick with my interpretation of the Chart . So far , in this Session, the price for $WTIC has been down to $100.74 . Rapidly getting back on track. Settlement of <$101.09 should see price back below $100 .

Regards,

Paddy

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Tuesday, September 30, 2008 - 05:06 am:

The $WTIC looks like it wants to become known as a "leading" indicator. Down over $10 at this time . Keeps this pace up and the next target is $93 .

Now less than $10 to my Lower Channel Boundary . So far ann impressive $35 drop from Recent $130 High to $95 as I write.

Would appear that there is Less Demand for Oil. For sure ships at anchor use less bunker oil.

Regards,

Paddy

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Tuesday, September 30, 2008 - 09:02 am:

$WTIC Settlement was $96.37 so next target is $93.10 . In this new session has traded down to $95.40. This downside "rally" - blindsided by the Bollinger Band that was touched but not recorded on the Chart. I may be alone with that interpretation but todays action tells me that it is a correct interpretation. Tomorrow L TRL at $84±.

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Wednesday, October 01, 2008 - 02:30 am:

Price of oil swings widely following U.S. bailout rejection

............Pervan said oil futures will likely fall to US$80 a barrel over the next six months and may reach as low as US$60.

Falling global demand for oil also was keeping downward pressure on prices.

"Data from Japan is showing oil demand in August down 11.8 per cent from a year ago," said Olivier Jakob of Petromatrix in Switzerland, adding that the International Energy Agency, the Paris-based energy watchdog, would have to make "drastic revisions" to its oil demand figure. ........

http://www.oilweek.com/news.asp?ID=18857

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Saturday, October 11, 2008 - 12:20 am:

$WTIC Traded below $80. So far down as Low as $78.61 . Appears to have been a +ive test of support level as price rebounded to $81.36 . Now $80.93 .Wait and see where Settlement is placed .

Paddy

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Thursday, October 16, 2008 - 06:47 am:

$WTIC - The price has gradually drifted down to where it again hit thye Lower Boundary. Today's Settlement of $74.54 resulted in a Close below the Lower Boundary of descending "channel". Next downside Fib level is $74.15 and then $73.44 - $72.56 and $71.13 .

Paddy

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Friday, October 17, 2008 - 07:58 am:

Yesterday the Lower Boundary of the descending, slightly expanding channel was clearly broken to the downside. The Settlement of $74.54 was approximately $2 below the boundary [ non-horizontal TRL ]. Today the drop to $69.85 took out another major support Fib Level .

Now looking at $69.70 - $68.82 as Support. It has been tested already and if it fails then could see $65 tested.

Paddy

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Thursday, October 23, 2008 - 01:02 am:

$WTIC

22102008 $WTIC price range appears to be holding the course as it progresses downwards towards $50 . Since September 23 the price range has been defined by a descending " timbershute' or perhaps more appropriate a "pipeline" . Barring any serious disruptions, like the CRDs meeting to manipulate the price, the $WTIC should hit $50 in the first week of November . Then ......... [ to be continued ]

Regards,

Paddy

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Thursday, October 23, 2008 - 05:46 am:

The $WTIC Stayed the Course

Range $66.20 to $71.80 with Settlement at $66.75 . Right smack in the middle of the "pipeline".

Still on target for $50 in first week of November.

Regards,

Paddy

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Friday, October 24, 2008 - 06:41 am:

$WTIC Still in the Pipeline

Bit of upward movement but still within the descending "pipeline" headed for Target of $50 . That is unless the CRDs really screw up the Market tomorrow with a drastic cut in production.

egards,

Paddy

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Saturday, October 25, 2008 - 07:47 am:

$WTIC

Production cut by the CRDs had no upward effect on price of oil. Price stayed within boundaries of the "pipeline" Range was $69.50 to $62.65 with a settlement of $64.15 . Progressing nicely towards $50. arrival date still !st week of November.

Regards,

Paddy

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Tuesday, October 28, 2008 - 09:00 am:

$WTIC

Stayed the course . Range $61.30 - $65.77 and Settlement at $63.22 . Still in the "pipeline" headed for $50.The announced production cut appears to have been a non-event. Probably the only way the drop in price will be halted is by one or more of the following :

1] Another surprise announcement of an additional cut - say 1.5 million barrels;

2] Major production facility in Saudi Arabia taken out by terrorist action. Would have to be Saudi Arabia as they would be the ones to fill any slack caused by an incident in another country;

3] Several tankers disposed of on the high seas or in the Straits by terrorists.

Just have to wait and see what happens in the coming days.

Paddy

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Tuesday, October 28, 2008 - 11:16 am:

Oil Futures : Crude Oil Jumps on Prospect of Another OPEC Cut

The rise above $65 to $65.60 didn't last very long as it is back down to $63.22 on NYMEX.

On Globex it rose to $65.77 but the settlement was $63.22 . Looks like the CRDs are going to have to do something more than utter a few words about another cut .Probably is no demand for it at this time .

That's my take . Here is article:

10/27/2008 3:18:00 PM

OIL FUTURES: Crude Jumps On Prospect Of Another OPEC Cut

NEW YORK (Dow Jones)--Crude oil futures moved above $65 a barrel after OPEC's secretary general floated the idea of a second production cut before December.

Light, sweet crude for December delivery traded 90 cents, or 1.4%, higher at $65.05 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 87 cents higher at $62.92 a barrel.

Oil prices rose by about $1 after Organization of Petroleum Exporting Countries Secretary General Abdalla Salem el-Badri said a second emergency meeting could be called before the group's holds its regular gathering in December. OPEC announced a cut of 1.5 million barrels a day below quota at an emergency session Friday, a move that failed to quiet oil market fears of weakening demand due to the deteriorating economy.

"The market is now on guard as to what OPEC's next inventory play is," said Phil Flynn, an analyst with Alaron Trading Corp. in Chicago.

The move higher was fairly small, however, as many doubt that OPEC members will fully comply with announced cuts, Flynn said. Members are likely to cut by only 60% of the agreed-to reduction, and could take months to comply even that much, analysts at JBC Energy in Vienna said on Monday.

Futures were already up from the day's lows as U.S. equities bounced back from early losses. The oil market has tracked stocks over the last month, as equities provide clues to the extent that the credit crunch will affect the wider economy.

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Monday, November 03, 2008 - 08:21 pm:

Rudy : Correct me if I am wrong. $WTIC completed EW 5 at recent High. Sequence was :

EW3 Ended at 79.86

EW4 Ended at 51.03

EW5 Ended at 147.90

Now in A

So far 147.90 - 90.42 EW1 of A

90.42 - 110.46 EW2 of A

110.46 - 61.30 EW3 of A

61.30 - 70.60? EW4 of A

Once EW4 of A is completed EW5 of A will take the price down to probably sub $50.

The count may be wrong as I ignored the mid August blip{8/21 $122]. With it A would have finished at 61.30 .

The other anomaly, at least to me, is the complete erasing of the September 22 high trades of $130 [ shown as 110.46 . There was a lot of press about it but not shown on charts.

If shown I do believe wave count might be different.

Enough rambling

Paddy

=====================$WTIC Weekly Chart

=====================$WTIC Daily Chart

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Tuesday, November 04, 2008 - 01:05 pm:

Hi Paddy,

Sorry mate I have only just noticed your post on this thread. I tend to only look at a couple of the threads on IC so totally missed this one.

The blip in mid August could not have been the end of wave 1 and 2 because then it would suggest that wave 3 terminated at $90.42 which would make wave 3 the shortest of wave 1, 3 and 5. This would break a major EW rule.

I tend to agree with your existing wave count however note that Wave A can legitimately be either a 3 lesser degree wave pattern or a 5 lesser degree wave pattern. I tend to think as you do that it will be a 5 lesser degree wave pattern because of the fairly weak lesser degree wave 4 sideways pattern developing at the moment. As wave 2 was sharp by the Alternation guidelines it means that lesser degree wave 4 will likely be a zig-zag type pattern which is what appears to be developing.

(Message edited by rdumas on November 04, 2008)

"...if one tortures a dataset long enough, it will confess to anything!"

- Andrew Lo

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Wednesday, November 05, 2008 - 06:03 am:

Rudy : I think todays action confirmed that there is a wave 4 . As I see it :

4[1] 61.30 - 70.60

4[2] 70.60 - 63.63

4[3] 63.63 - 71.77

Don't think it will go any Higher, or not much more . Need "room" for 4[5] . Upper limit is 90.42 .

Regards,

Paddy

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Wednesday, November 05, 2008 - 07:31 am:

Hi Paddy,

If 90.42 was taken out then it could indicate the following:

Option 1 - that the blip in mid August was wave 2 and that the 90.42 to 110.45 move was still part of wave 3 (seems unlikely)

Option 2 - wave A was from 147.90 to 90.42, wave B was from 90.42 to 110.45 and wave C was from 110.45 to 61.30 and that we are in the process of starting a new motive wave 1.

"...if one tortures a dataset long enough, it will confess to anything!"

- Andrew Lo

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Wednesday, November 05, 2008 - 09:01 am:

Rudy : Keep forgetting about the alphabet .

For $WTIC : Can the descent from 147.90 to now be just part of Wave A with

A1 == 147.90 - 90.42

A2 == 90.42 - 110.46

A3 == 110.46 - 61.30

A41 == 61.30 - 70.60

A42 == 70.60 - 63.63

A43 == 63.63 - 71.77+?

Regards,

Paddy

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Wednesday, November 05, 2008 - 09:12 am:

Hi Paddy,

Even though you have more accurately labelled it now, that's what I thought we were originally talking about. But if A4 encroached into the price band of A1 (ie, above 90.42 then that count would be incorrect because it would break one of the main Elliott Wave rules. This is why I mentioned the other two options of which I think option 2 is the more likely candidate.

"...if one tortures a dataset long enough, it will confess to anything!"

- Andrew Lo

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Wednesday, November 05, 2008 - 10:16 am:

Rudy : I'll take one more kick at the can.

=== Paddy ==========================Rudy

A[1] 147.9-90.42 .................. A 147.9 - 90.42

A[2] 90.42 - 110.46 ................B 90.42 - 110.46

A[3][a] 110.46 - 93.36 .............

A[3][b] 93.36 - 102.84 .............

A[3][c] 102.84 - 68.92 .............

A[3][d] 68.92 - 76.24 ..............

A[3][e] 76.24 - 61.30 ..............C 110.46 - 61.30

A[4][a] 61.30 - 70.60

A[4][b] 70.60 - 63.12

A[4][c] 63.12 - 71.77=/+ ............. 1 61.30 - 71.77=/+

NOTES A[4][c] may be just about finished. Assume, may be incorrect, that A[4] composed of segments a - b - c . So far nothing Ew wise has ben violated.

A[5] Will take Index down to possibly sub 50.

Regards,

Paddy

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Wednesday, November 05, 2008 - 10:34 am:

Hi Paddy,

You have described the two most likely options as I see them also. By the way, I like your labelling as it is very clear when describing a pattern that includes 2 or even 3 degrees of waves (ie, primary waves and sub-waves).

The reason that E Wavers use the more complex labelling is because they may at times be looking at a pattern that may be 6 or more degrees deep. In that case your labelling system would get out of hand.

"...if one tortures a dataset long enough, it will confess to anything!"

- Andrew Lo

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Tuesday, November 11, 2008 - 11:24 pm:

Lots of Oil

The International Energy Agency will likely cut its 2009 oil demand forecast again, say former IEA analysts. The agency's report, due out Nov. 13, could slash estimated demand growth to 320K-500K barrels/day from 700K. Last week, the IMF warned of the first simultaneous recession in the U.S., Japan and Europe in more than 60 years. "Given the downward revisions to the IMF data, it is highly likely they will revise demand down," JPMorgan's Lawrence Eagles said.

http://www.bloomberg.com/apps/news?pid=20601104&sid=aFJuuOvwM09A

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Tuesday, November 25, 2008 - 05:10 am:

Justice : Have on my chart that a "rally" was to start today. That was from the astro prediction made by -------[ don't remember his name] . Also two days of testing support at $50. If it gets legs and Closes above $53 or better $55 then there will be rejoicing by the CRDs sitting around "by the light of the gas flareoffs".

You should know that one.

PS There will be some eating crow today as his prediction was spot on .

Adios

Paddy

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Tuesday, December 02, 2008 - 03:56 am:

Oil drops 8% after OPEC keeps output unchanged

Crude oil for January delivery fell $4.54, or 8.4%, to $49.90 a barrel in electronic trading on Globex.
The contract hit an intraday low of $49.52 a barrel.
"The bulls may have been hoping for OPEC to cut this weekend, but it was not to be, as the group has decided to wait and ensure strict compliance output limits before cutting again," said Michael Davies, an analyst at Sucden Research, in a note.
The Organization of Petroleum Exporting Countries ended a weekend meeting in Cairo without any decision on a production cut.
OPEC President and Algerian Oil Minister Chakib Khelil said he expects oil demand to decline from a month ago, and said the group would take necessary action on Dec. 17 when it meets in Oran, Algeria.
Separately, OPEC Secretary General Abdalla Salem El Badri said Monday that the cartel will cut production in December by a "good amount," according to media reports. He also said that crude prices in the range of $70-$90 a barrel would be "very reasonable."
"When it comes to calibrating supply and demand to fit the new post-September economic realities, OPEC seems to be in a state of denial and surprisingly blasé about the dire state of the markets," said Edward Meir, an analyst at MF Global, in a note.
"This is especially evident if one compares the action of the cartel to other commodity producers, say mining companies, who have slashed output substantially in light of the recent demand implosion for metals," Meir said.
Video: Hot Stocks: Energy Underperforms
Energy stocks are weighing on the broad market, even as the Dow Jones Industrial Average retreats nearly 4%. Crude prices are also falling back after OPEC failed to approve any further production cuts. Steve Gelsi reports. (Dec. 1)
Gold and other metals posted steep losses Monday, with February gold futures dropping 5.2%. Silver futures fell 8.4%. See Metals Stocks.
James Williams of WTRG Economics said that Saudi Arabia, a key member of OPEC, may refrain from additional cuts in their own production until other members are in compliance with existing agreements to cut production.
While supplies are down about 1.2 million barrels per day in November, that figure is still short of the 1.5 million barrel goal agreed in late October, Williams said.
"Preliminary estimates indicate that Venezuelan and Nigerian cuts are minimal and that Iran's cut is only half of its allocation," Williams said. At the same time, U.S. consumption in the last four weeks is 1.35 million barrels less than last year.
Also weighing on oil prices Monday were significant drops in manufacturing gauges in the United States, China, the euro zone and Britain. A gauge of China's manufacturing activity in November, as compiled by brokerage CLSA Asia-Pacific Markets, marked the sharpest drop in the history of the survey, which began in 2004.

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Thursday, December 25, 2008 - 02:43 am:

February crude down 6% to $36.63 a barrel in electronic trading - Oil falls on expectation inventories rose a third week

NEW YORK (MarketWatch) -- Crude-oil futures fell Wednesday for a third session, tumbling below $37 a barrel on expectations that U.S. crude inventories had risen for a third week. The Energy Information Administration will release last week's petroleum inventories data Wednesday. Analysts surveyed by energy information provider Platts expect a 1.5 million barrel buildup in crude stockpiles. Crude for February delivery lost as much as $2.35, or 6%, to $36.63 a barrel in overnight electronic trading

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Tuesday, January 20, 2009 - 01:13 am:

Morgan Stanley to secure supertanker to store crude oil

Shipping brokers in Tokyo say that Morgan Stanley has joined a growing international scramble to secure an oil supertanker and use it to store millions of barrels of crude in what commodity dealers believe may be the “trade of the year”.

The rush to snap up supertankers and profit from the huge “contango” spreads between the falling crude spot price and rising futures price comes amid dire warnings by analysts over the future of the wider shipping industry.

Massive overcapacity and slumping global trade are expected to trigger a second collapse in cargo rates, which already plunged nearly 94 per cent last year. .

....... Rough calculations by shipping brokers suggest that if a trader were to buy two million barrels of crude at today’s prices, insure them and store them for a month in the largest grade of supertanker at present charter rates, the buyer would be paying about $1.15 a barrel on top of today’s spot price of $35.50.

The crude futures price at the end of March stands about $8 higher than today’s spot price, and six months out the spread is more than $21 a barrel. ......

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resource s/article5528333.ece

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Tuesday, January 27, 2009 - 08:27 am:

Rudy / Ody : I like this quote considering the writers are getting paid to analyze the Markets. I guess we have to sub-divide into quality and quantity.

"""The oil market is back to its old tricks again… more volatility.

Just when some folks looked at the huge price decline and thought the market was down for the count, it promptly comes roaring right back again.

On the back of the latest Energy Information Administration report that showed another huge buildup of supplies, the front-month futures contract traded at a low of $39.11 a barrel last week. But instead of getting knocked down to another new near-term low, it rallied up by $9 a barrel at the end of last week to hit its current high of $48.50 a barrel."""

I am known to ignore certain EW rules but at least I knew that the rise from $39.11 was a certain and NO SURPRISE.For me, it fell short of my target of $50 . By my numbers it made it to $48.59 . Now at $45.72 . Do believe we shall see a bit more downside on this sub wave.

Regards,

Paddy

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Tuesday, January 27, 2009 - 09:48 am:

Hi Paddy,

So far it is acting exactly as we would expect under EW rules.

"...if one tortures a dataset long enough, it will confess to anything!"

- Andrew Lo

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Tuesday, January 27, 2009 - 10:37 am:

Rudy : I know it is . Just wanted to state that even with mis-labeled waves one should not be expressing surprise as to the movement of the WTIC. I just thought it strange that some Pro's would come out with the statement that they did.

Correct me if I am wrong . From 48.59 EW (ii) we have a potential 13 sub waves to complete before EW 5 is completed.

Regards,

Paddy

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Tuesday, January 27, 2009 - 12:45 pm:

Hi Paddy,

That's correct if wave iii or v don't have any extensions. If one of them has extensions then there would be 17 sub waves.

"...if one tortures a dataset long enough, it will confess to anything!"

- Andrew Lo

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Wednesday, January 28, 2009 - 07:12 am:

Hi Rudy / Ody : Love this report explaining what was "written in the stars" - so to speak .

CRUDE SLUMPS 9% as data fan ECONOMIC WORRIES

Crude-oil futures dropped 9% Tuesday, as another set of U.S. economic reports unleashed fresh worries that persistent economic weakness will spell further erosion in energy demand. Also pushing oil lower, analysts predicted that new data will show U.S. crude inventories have risen for a fifth straight week and reached the highest level seen in 17 months. Falling for a second session, crude oil for March delivery closed down $4.15, or 9.1%, at $41.58 a barrel on the New York Mercantile Exchange. The percentage loss was the biggest since Jan. 7
==============

By my numbers the downward movement temporarily stopped at the exact level I had calculated a turn point for (iii)(iii)(iii). Namely $41.41 . I think the label is correct.

Realized I had made a mistake . $41.41 was a turn point but this sub wave (iii) of (iii)(iii) is not yet complete . Working of (iv) still need final (v) to complete (iii)(iii) .

Regards,

Paddy

(Message edited by paddy on January 28, 2009)

paddy

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Sunday, February 08, 2009 - 09:24 am:

Futures Outlook - An Excerpt from CRB'S Futures Market Service

Crude oil spot prices remain severely depressed, with the only solution being further OPEC production cuts

The crude oil market remains in a steep contango situation whereby the nearby futures contracts trading at cheap levels in the low-$40 area but where the back months are trading at substantially higher levels near $60-70. This creates an arbitrage condition whereby speculators can buy physical oil cheaply, sell it forward at much higher prices, and then store the oil until delivery, thus pocketing a nice return on investment. There is currently a huge spread of nearly $30 between the spot futures contract and the Jan 2014 futures contract. The steep contango has been in place since late-October when spot crude oil prices fell below the $70 per barrel area.

The contango situation exists because spot prices are severely depressed by market expectations for weak demand and continued production oversupply over the short-term. At the same time, the market has pegged crude oil prices for delivery in coming years at substantially higher levels because the market believes that the global economy will eventually rebound and fuel demand will reemerge.

Many arbitragers have taken advantage of the contango situation in the crude oil market for the past several months. However, the arbitrage trade has not even made a dent in flattening the crude oil futures curve. The only result has been that inventories of crude oil are bulging worldwide. By most accounts there are virtually no storage facilities left to store oil, including on ships. In fact, US crude oil inventories have risen sharply in the past four months by 19% to a 1-1/2 year high and are 9.5% above the 5-year seasonal average.

OPEC is the only player that has the ability to change the current situation since there is little chance of an upward rebound in fuel demand anytime soon. OPEC has so far slashed production by 14% (4.1 million bpd) to a 4-3/4 year low of 26.2 million bpd from the record high of 30.315 million bpd seen last July. Yet that 14% production cut has not been deep enough to remove the excess supply from the market. OPEC has no choice but to make further production cuts if it wants to boost spot prices from the current depressed levels.

paddy

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Saturday, February 14, 2009 - 11:04 am:

From Smart Profits Report

Oil Market Falls Further

With global demand nose-diving for just about everything, it's no surprise to see the International Energy Agency say that demand for oil will plunge by 980,000 barrels per day to 84.7 million this year. That's almost twice the amount it forecast just last month - a telling sign that 2009 is trudging down the same dark path as 2008.

With oil demand set to average 1.4 million barrels per day less this year than in 2007, I wouldn't mind betting that we'll see that number fall further, as the fallout from this crisis continues.

When America, Europe, and Asia are all taking a bath and the International Monetary Fund projecting a measly 0.5% GDP growth rate for 2009, you wouldn't exactly expect the oil to be gushing.

Wanna Do The Contango?

No wonder all those oil tankers are sitting in offshore waters, bloated with 80 million barrels of oil that nobody wants right now.

This is because the present oil price is less than longer-dated futures contract prices, so energy traders are busy hoarding it for the future. After all, if you can buy oil cheaper now, even if you don't necessarily need to use it right now, why wouldn't you? You'll use it or sell it eventually, but this way just makes smart business sense. It's similar to the way some savvy airlines hedged the cost of the oil they were buying before the prices shot up.

So these oil players aren't actually taking delivery of the oil at the moment, because they're making a profit on both the transaction and also benefiting because it's cheaper to store the oil on a tanker at sea than take delivery of it.

This, coupled with the demand slump, is why you're seeing the price of oil remain relatively stable at the moment. But although the relief is pretty nice right now, enjoy it while it lasts, as it certainly doesn't mean we're done with volatility.

paddy

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Thursday, May 28, 2009 - 07:45 am:

Rudy : Light Oil rising just fine. Surpassed first target of 63.30 . Two close prices for today 63.23 and 63.45 . First bis an EOD figure while other is settlement on Globex.

The horizontal lines on chart are the upside targets as long as 63.30 now holds as support .

Regards,

Paddy

rdumas

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Thursday, May 28, 2009 - 08:48 am:

Hi Paddy,

As I expect the complete move up to be a 3 wave move I believe that we have had the first 2 moves and are in the final stages of the 3rd move up now. I don't have exact figures but based on approximate figures I would expect this final wave to go up to roughly around the $65.82 level based on the 3rd wave being about the same range as the 1st wave.

"...if one tortures a dataset long enough, it will confess to anything!"

- Andrew Lo

paddy

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Friday, May 29, 2009 - 10:36 am:

Rudy : In last session price came close to your target of $65.82 . I think there is still some more upside . That is based on my interpretation / placement of the boundaries of the Ascending Channel.

As long as 65.20 or 64.46 holds the price should test the Upper Boundary - level depends on time . Presently target is $67.55 to perhaps $68.30 . All Fib related values.

Regards,

Paddy

$WTIC Daily Chart - 05282009

paddy

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Saturday, May 30, 2009 - 11:01 am:

Rudy:

Light Oil [ $WTIC / CL N9 ] heading for Upper Boundary . With a settlement of $66.31 and Last Trade at $66.64 the stage is set for a rise to $68.30.

More problems in Nigeria will assure a continuation of an increase in the price.

Chart to follow.

Regards,

Paddy

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Saturday, May 30, 2009 - 11:24 am:

$WTIC Daily Chart for post 1640.

rdumas

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Saturday, May 30, 2009 - 12:33 pm:

Hi Paddy,

You're spot on. We can forget about wave equality. This baby wants to fly.

"...if one tortures a dataset long enough, it will confess to anything!"

- Andrew Lo

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Sunday, May 31, 2009 - 05:55 am:

Rudy : Adjust your EW using $42.20 as the LOW. That
how I have come up with my numbers. I used the Monthly
Low for CL N9 [ presently active month ].

Regards,

Paddy

CL N9 Monthly Chart

rdumas

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Sunday, May 31, 2009 - 09:09 am:

Hi Paddy,

Sorry mate but I use the figures for WTIC because I don't like the continuing changing goal posts of the futures contracts. The figures I used for my ranges are shown below. The 55.00 and the 46.20 are estimates only because I don't have the exact figures but they should be close enough. Wave equality has already gone and the next range is 125% of the original range which gives me a target of $68.55.

"...if one tortures a dataset long enough, it will confess to anything!"

- Andrew Lo

paddy

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Sunday, May 31, 2009 - 11:10 am:

Rudy : You are using Daily figures. I am using Monthly . By my numbers if the price Closes above $68.30 then $84 could be attained if the rise continues before a retracement occurs.

Are methods are different but we come up with essentially the same numbers . So now just a matter of waiting to see how high it will go on this leg.

Have one for me

Paddy

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Thursday, June 04, 2009 - 07:52 am:

Rudy : Light Oil reversed at $69.05 which was just short of resistance at 69.18 .

With Settlement of 66.12 or 66.07 the price in this next session should test 65.20 again and then 64.30 and 63.7.

Could see a sub 63 if 200 SMA [ 61.59] is tested.

Regards,

Paddy

$WTIC Daily Chart 06032009

paddy

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Wednesday, June 10, 2009 - 07:48 am:

Rudy : Light oil back on track . Cleared $68.28 . Presently trading at $70.61 [ High $70.69 ] .

Next target is $72, then $74.45 and $84 .

Adios,

Paddy

rdumas

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Wednesday, June 10, 2009 - 04:32 pm:

Ho Paddy,

So we've had around a 30.92% retracement of the fall from $147.90 to $35.13 on the WTIC chart. Perhaps another 7.28% move to take it to the 38.2% level retracement ???

"...if one tortures a dataset long enough, it will confess to anything!"

- Andrew Lo

paddy

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Friday, June 12, 2009 - 07:58 am:

Rudy : No stopping this one. By my numbers we are close to 30% and headed for 38.2% .

With Close above 72.10 the immediate target is 74.5. The Upper red boundary is at 77±. The Upper blue boundary is at 84 which is also a Fibonacci level.

By my calculations 82.58 is result of 38.2% x A + 42.20. I know your numbers are different but we are on same page I do believe.

Regards,

Paddy

$WTIC Daily Chart 06112009

rdumas

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Friday, June 12, 2009 - 09:41 am:

Hi Paddy,

Following are my figures. I agree that the target is 38.2%

Range down 147.90 - 35.13 = 112.7
Range up 73.23 - 35.13 = 38.1

38.1/112.7 = 33.78%

Target = 35.13 + (112.77 x 0.382) = $78.21

"...if one tortures a dataset long enough, it will confess to anything!"

- Andrew Lo

paddy

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Friday, July 10, 2009 - 07:50 am:

Rudy :Is this A-B with C to come?

Looks like Light OIL is setting up for wave C. That should see $30 tested by my numbers. Couple of dollars after the implied future fall is nothing.

CL 09 Light Oil Weekly Chart

rdumas

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Friday, July 10, 2009 - 08:15 am:

Hi Paddy,

It's difficult to see from the time period provided. What you say could be correct.

On the other hand we don't know from the time period covered whether the move down from the original high was not a 5 wave move and the recent move up to $73.90 was wave A of an ABC corrective pattern. That scenario would mean that we are now in a wave B down to be followed by a wave C up.

"...if one tortures a dataset long enough, it will confess to anything!"

- Andrew Lo

paddy

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Friday, July 10, 2009 - 09:05 am:

Rudy : Here is a chart that you are familiar with . In your estimation is it B or C heading south?

Regards,

Paddy

WTIC Daily Chart

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rdumas

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Friday, July 10, 2009 - 09:21 am:

Hi Paddy,

A completed idealised Elliott Wave is an 8 wave pattern. There are 5 waves in an impulse wave followed by 3 waves in an ABC correction. Once this 8 wave pattern completes then you move to the next 8 wave pattern.

Note that those completed 8 wave patterns can be either in the up or down direction.

If the red pattern down is an 5 wave pattern then the move up to the $73.90 was wave A up and we are now in wave B down.

If the blue pattern up is a completed higher level 5 wave pattern then the red pattern down is indeed wave A down and the current red pattern up was wave B and now we are about to start wave C down. The problem is that we cannot determine from the chart which case we actually have in play.

"...if one tortures a dataset long enough, it will confess to anything!"

- Andrew Lo