Over the last three months, crude oil prices have acted like a dog with a shock collar around its neck. One minute it's barreling up a hill at warp speed straight for the mailman at the top of the driveway. And then...
... ZAP! It's jolted by an invisible electric fence and sent scampering right back down to the place it started. Talking numbers: the market has been range bound between $75 and $65 per barrel.
Which begs the question: Who controls the collar?
According to the mainstream experts, oil prices are in a classic holding cell created when two opposing fundamentals reached a standstill. Here, the following October 9 Wall Street Journal explains:
"Crude Torn... the market is unsure whether oil is a commodity that should be influenced by supply and demand, or whether it's an asset class that is determined by equities and currencies."
If the former, then energy prices should turn down: U.S. distillates stocks are at a 23-year high, while 2009 demand figures show a CONTRACTION of 1.7 million barrels a day.
If the latter, energy should rise alongside a rallying stock market and falling U.S. dollar.
Problem is, there's no way of knowing which "IF" applies until AFTER prices break out in a meaningful trend. And even then, the fundamental lines are a blur.
So, what's the alternative? Well, where the usual experts see oil prices trapped in a "prison" of fundamental making -- Elliott wave analysis sees a wide, open opportunity born of one, clear pattern: the contracting triangle.
Odds are, when the words "stuck," "range bound," and "held hostage" appear in the mainstream news reports on a certain market -- a contracting triangle is underway. A triangle develops as a lingering, sideways, five-wave pattern labeled A-B-C-D-E. They most commonly form in 4th waves of a 5-wave Elliott wave pattern and resolve in a sharp, swift thrust in the direction of the previous larger trend. Meaning: the frustration of the wait is always rewarded with a dramatic breakout.
The Energy Specialty Service editor Steven Craig has identified a contracting triangle at large in oil since August. And, just as the letter of the Wave Principle suggests, Steven expects the energy's next move to be an "explosion" in one direction.
So, what are you waiting for? Get the latest crude oil insight from the very same service that foresaw the market's July 11, 2008 all-time peak BEFORE it occurred. To wit: In the July 10, 2008 forecast, Steven Craig acknowledged the downside potential in the market’s near-term future and wrote:
“Two key topping indicators are still evident – extreme bullish sentiment and relentless media attention. Possible third and fourth signs – volatility and cries for more government regulation of commodity trading – are nearing their heads… It all points to a very mature uptrend.”