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Energy: EWI's Chief Oil Analyst Reveals When Elliott Is at Its Best (Part 1)

New insights from our Chief Energy Analyst

by Alexandra Lienhard
Updated: August 19, 2016

Crude oil has been on a wild ride and has kept investors glued to their screens. Steve Craig, the editor of our Energy Pro Service, explains how he uses the Wave Principle to keep his subscribers ahead of major moves in both crude oil and natural gas.

You can watch part 2 of this in-depth interview with Steve Craig here.

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[Editor's note: A text version of the interview is below.]

Alexandra Lienhard: Crude oil has been on a wild ride in recent years and the dramatic price swings have kept investors glued to their screens. And it's not just investors, as the price of oil determine what you pay at the pump and the grocery store.

Steve Craig is Elliott Wave International's Chief Energy Analyst and uses his own experience in the energy markets to evaluate the implications of each move -- and keep his subscribers a step ahead of major moves. Steve is joining me today on ElliottWaveTV to talk about his background and the service he provides for Elliott Wave International.

Now Steve, I know you've been involved with energy futures for quite a while now, so how did you become interested in financial markets in the first place?

Steve Craig: It goes all the way back from when I first graduated from Oklahoma State University. My first real job, I dealt with a lot of farmers and ranchers; talking grain and livestock prices was pretty much an everyday thing. I learned early on how to construct the hedge, although I had no practical experience at it. A couple years into it, I decided I wanted to go back to grad school, and right before classes were starting, I met with a friend of mine who was a broker at Merrill Lynch. We were sitting at his desk, talking, and his office manager walked up, introduced himself and the next thing I knew, I was in his office interviewing for a position as a commodity broker. It was such a great opportunity, I just jumped all over it.

Alexandra: And what drew you to the Wave Principle, specifically, and ultimately Elliott Wave International?

Steve: Once I got into the business I learned very quickly that I needed to know more about technical analysis. I went out and bought several books on the subject and really immersed myself into it. And I always felt like there was a better explanation for how the markets worked. I kept looking and looking, and finally along comes Bob Prechter who'd made several good calls in the stock market on what was FNN at the time. I went out and bought his book, The Elliott Wave Principle, that he and AJ Frost had written. And that seemed like a very nice explanation for how the markets worked. I tried to make that transition into applying it to the commodity markets I was concerned with, but quite frankly it was a struggle. I kept trying to rush my wave counts to fruition. But once I realized I was doing that, it took a while to get the hang of it. I finally made the leap somewhere in there of being a student to being a practitioner, and really I've never looked back.

Alexandra: So you made the leap from an Elliott wave student to an ardent practitioner, but how did you then make the jump one step further to become Elliott Wave International's Chief Energy Analyst?

Steve: Once I left Merrill Lynch back in the early 1990s, natural gas had become a hot market, and I went to work for Kerr-McGee. I took care of their oil and gas hedging transactions. Then from there, Texas was going through their early stages of deregulation. And Central & Southwest was based in Dallas, and they're a very large, public utility holding company. They had three electric utilities in Texas. They had one in Oklahoma, and they needed to know how to go about constructing hedges and being able to compete in unregulated markets, so they brought me on to do just that, create a hedging program. A few years into that, they elected to sell themselves to American Electric Power. At the time, I was subscriber to Elliott wave, and they had actually called me and asked if I had any interest in being their oil and gas analyst. That was just absolutely a perfect fit for me, and I jumped all over that opportunity. That was 15+ years now. I'm certainly glad I made that switch, and I'm looking forward to many, many more great years.

Alexandra: It sounds like being a subscriber of Elliott Wave International ended up paying for itself in many ways! What do you find most useful about using the Wave Principle to forecast market action?

Steve: There's a lot of things that are useful about the Wave Principle; it's hard to summarize it with just one. Once you look at the markets and understand that they do produce fractals and repeat themselves over and over again, I think that gives you different eye to view market with. And once you can see those patterns forming and developing and moving from one structure into the next, I think that is really the moment at which the Wave Principle is at its absolute best for forecasting price action. You know with a great deal of certainty that pattern is complete, that a new pattern will begin, and you have some idea of what to expect after that. So, from a directional perspective, I don't think there's anything better out there.

Be sure to come back Monday, August 22 for part 2 of this in-depth interview with Steve Craig.

Learn more about Steve's forecasts and analysis by clicking the link below.

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