General overview for 17/01/2017:
The outlook for the Crude Oil is quite unclear, mainly due to too many Elliott wave scenarios possible (more than 3 at the same time). Nevertheless, I will try to present two most probable counts and each of them has totally different consequences.
First one is the very strong impulsive bullish scenario, we can see at the Daily time frame chart. The sequence of 1-2, 1-2. 1-2, (i)-(ii) indicates a very strong wave 3 unfolding, but so far it is all unconfirmed. The invalidation level for this count comes with the level of 42.14 violation.
The second count, alternative one, suggest more sideways-to-down kind of price action as the base around the level of 38-42 still hasn’t been completed yet.In this count, the upward structure is only a part of a more complex correction (WXY or WXYXXZ), that still can unfold in coming days.
For both counts, the most important level is technical support at 42.14. Break out below this level will invalidate the main bullish count and confirm more downside to come in the alternative bearish count.
26.02 – Swing Low
39.12 – Technical Support
42.12 – Technical Support |Invalidation/Confirmation Level|
48.37 – WS3
49.89 – WS2
50.97 – Technical Support
51.56 – WS1
53.29 – Weekly Pivot
54.92 – WR1
55.20 – Local High
The long-term swing traders should pay attention to the level of 42.14 and should trail all the buy orders that are in play already.
The short-term day traders should take into account, that the market is possibly unfolding a triangle pattern or some other kind of a complex correction, so price action might get full of whipsaws and false break outs*.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.