On July 2, Elliott wave analysis called for an “aggressive” move to the downside in oil. The summer poor-formance speaks for itself
On September 10, crude oil prices plummeted to their lowest level since December 2021. Mainstream experts cited two distinct causes for the energy’s selloff. The first, from Reuters, Sept. 10:
Oil settles near 3-year low on weak demand outlook… after OPEC+ revised down its demand forecast for this year and 2025. Until last month, OPEC had kept the forecast unchanged since it was first made in July 2023.
There’s almost no oil demand growth in the advanced economies this year.
And the second from Oilprice.com, Sept. 10:
Oil Prices Drop 4.5% On Record-Bearish Sentiment from Money Managers
Hedge funds and other money managers have turned the most bearish on crude ever since the CFTC started to publish information on market positioning.
That’s a bearish chart if ever there was one.
But neither it – nor the supposed weak demand data from OPEC – are the cause of oil’s drop to 3-year lows. If anything, record short positions among hedge funds are the effect of a downtrend in oil prices that began in early July.
At that time, on July 2, our Energy Pro Service presented this labeled price chart of crude oil, which planted the energy at the start of a third wave decline. Wrote Energy Pro Service:
It’s aggressive, but if a downward reversal is underway, Crude should extend the decline from today’s 84.38 rebound high in an impulsive manner and I’d expect the rest of the complex to follow suit. Support below today’s 82.72 low is around 82.27. Trade below last Friday’s 80.97 low should strengthen the bearish case.
This next chart shows the selloff that ensued:
Time and again, “fundamental” market analysis uses external news events to explain market activity – after a trend has already announced itself.
Elliott wave analysis offers investors the opportunity to assess price action through a purely objective lens – that of price patterns and technical indicators. It is via this lens that the market’s potential path forward makes itself known, in advance.
On September 11, Energy Pro Service released a newly updated price chart of crude oil and said, an important turning point “should be drawing near.” Our analysis includes key price levels the market must honor to confirm when – and if – the bearish stage will be set for further decline.
No news. No noise. No nonsense. Energy Pro Service stays close to what matters most: price patterns unfolding in real time, on every time frame.
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