• 748 days Will The ECB Continue To Hike Rates?
  • 748 days Forbes: Aramco Remains Largest Company In The Middle East
  • 750 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,150 days Could Crypto Overtake Traditional Investment?
  • 1,154 days Americans Still Quitting Jobs At Record Pace
  • 1,156 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,159 days Is The Dollar Too Strong?
  • 1,160 days Big Tech Disappoints Investors on Earnings Calls
  • 1,161 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,162 days China Is Quietly Trying To Distance Itself From Russia
  • 1,163 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,166 days Crypto Investors Won Big In 2021
  • 1,167 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,168 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,170 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,170 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,173 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,174 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,174 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,176 days Are NFTs About To Take Over Gaming?
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Elliott Wave International

Elliott Wave International

Elliott Wave International

Elliott Wave International (EWI) is the world's largest market forecasting firm. EWI's 20-plus analysts provide around-the-clock forecasts of every major market in the world via…

Contact Author

  1. Home
  2. Markets
  3. Other

Crude Oil Works In Mysterious Ways

But there is one solution to staying ahead of oil's trend changes -- Elliott wave analysis

You know the expression "God works in mysterious ways"?

Well, according to an August 6 CNBC article, the price action of one financial market -- i.e., crude oil -- has out-mystified even God himself. Or, rather, the well-heeled star of the oil world, Andy Hall -- a.k.a. "God Trader."

According to CNBC, Hall's oil-focused commodity hedge fund plunged 17% in July, its second-biggest monthly loss ever. And one that left the fund "$500 million poorer."

In a letter to investors, Hall admitted failing "to anticipate a sudden market shift that roiled crude," and wrote:

"Last month was brutal for most commodities and anyone investing in them."

No argument here: July was a "brutal" month, as crude oil prices crashed 21% for their biggest monthly decline since the 2008 financial crisis.

And, yes -- many oil experts (despite their God-like reputations) failed to anticipate the roiling "market shift." The reason why they failed to see it coming, though, may surprise you.

Here's the thing: From its March 2015 low to June high, oil prices had soared 40%-plus to enjoy their strongest rally in six years. Not to mention a positive fundamental backdrop including strong demand and escalated violence in the Middle East, led by protests in Libya and conflict in Yemen.

From a mainstream perspective, oil's downside looked overdone, as this bullish May 6 news source affirms:

"Global demand continues to surprise to the upside with data showing no signs of slowdown despite a pick-up in prices... Bulls are in control of the market." (Reuters)

Looking at that bullish backdrop of "market fundamentals," there was simply no way to have foreseen the opposite scenario -- namely, oil's imminent reversal. From the viewpoint of Elliott wave analysis, however, oil's reversal was quite plain to see. In fact, our June 2015 Elliott Wave Theorist set the stage for just such a move:

"The price of oil has been stunningly volatile, but -- unlike the stock market -- it has consistently responded to our wave interpretations and extremes of sentiment...

"Figure 14 marks our predictions and updates prices. On a near term basis, the latest rally is now nearly the size of the rally of early 2014. The 'No Bottom in Sight' articles have stopped appearing, and the Daily Sentiment Index (courtesy trade-futures.com) has hit 86%. The rally should be about over."

Elliott Wave Oil Chart 2007-2015

Let's be honest. We're all human. There's no such thing as omnipotence in the world of trading or market-forecasting. Elliott wave analysis is not about 100% certainties. But it is about identifying the most likely turning points in advance -- not by reading the news, but by reading the Elliott wave patterns unfolding on the price charts themselves.

 


In a new FREE report titled "Peak Oil -- and Other Ways Crude Oil Fooled Almost Everyone," we show you how Elliott wave analysis has remained one step ahead of not just the July sell-off, but the major peaks and lows that have occurred since oil's all-time 2008 high near $150 a barrel.

If you're already our free Club EWI member, click here to get instant access to the full report, absolutely free.

Or, take a minute to join the free online Club EWI community. And with your new password, read the "Peak Oil" report anytime you want -- 100% free!

This article was syndicated by Elliott Wave International and was originally published under the headline Crude Oil Works In Mysterious Ways. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

 

Back to homepage

Leave a comment

Leave a comment