Crude Oil Clarity: Focus on This!
by Nico Isaac
Updated: November 07, 2018
The chart below of crude oil looks at the final week of October. You can see that after a few days of sideways action, prices turned up on October 26. The question before traders that day was simple: Would crude's price keep rising?
At the time, news reports focused on two main events. The only problem was, those events were set to move crude oil in every possible direction.
Event One: The large stock market sell-off, which was supposedly bearish for crude oil.
"Oil Prices Pulled Down by Global Stock Market Plunge"
(Oct. 26 Economic Times)
But, another article said it was a temporary blip for crude oil.
"Oil Prices Steady After Stock Market Plunge"
(Oct. 26 Fox Business)
And, still a third headline claim it could reportedly hold oil hostage for weeks to come:
"Oil is likely to continue to follow the stock market
until conditions normalize, which could take weeks."
(Oct. 26 MarketWatch)
Event Two: Looming sanctions on Iran. They were supposedly bullish for oil:
"Oil Rises Ahead of Iran Sanctions"
(Oct. 26 Reuters)
Until, that is, oil prices decided to ignore the bullish boost:
"Oil falls on Oversupply Worries Despite Iran Sanctions"
(Oct. 26 LiveMint)
All of which was to say: Conventional wisdom could not get its story straight about oil's next move.
But on October 26, our Energy Pro Service wrote one scenario for oil's near-term future, titled "Big Picture Bearish Outlook." There, chief energy analyst Steve Craig drew a bold line pointed down and said:
"The rally should prove corrective and set the stage for further decline.
Trade below the 66.20 overnight low should be a good clue and I'll be looking for acceleration into new low ground to strengthen the immediately bearish case."
From there, crude oil soon committed to the downside, moving below 66.20 and ending October with its worst monthly performance in two years.
So: Every oil trader wants to know whether oil's freefall is finally over.
And, every oil trader can have the answer today -- in our Energy Pro Service. See below for more.
Now You Can Track – And Get AHEAD Of – The Psychology Trends that Often Drive Energy Prices
Crude. Brent. NatGas.
Riddle me this: The news is bullish, but oil and ETFs FALL.
Or, oil inventories are reported full, and prices RALLY.
As a trader, you see it all the time. If you sweep such "inconsistencies" under the rug, you’re missing the point.
Oftentimes, crude and natgas go where traders' psychology goes. And no other forecasting method lets you track this powerful force -- and forecast it -- as Elliott waves do.
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