Oil firstly extended lower at the end of the past week in wave C as highlighted in our past updates. Well, we anticipated a five wave decline from 98.00 but because of an overlap with 96.57 market actually completed a three waves (a)-(b)-(c) down to 95.11. This is a structure of a corrective movement so we think that whole price action from Jan 30 is actually an incomplete triangle in wave 4), especially if we consider that market did not move through previous wave A swing level. If we are correct, then market will stay sideways for the next 24-48 hours before price breaks higher, through 98 mark that will open door for $100, psychological level.
What is a triangle?
A
Triangle is a common 5 wave pattern labeled A-B-C-D-E that moves counter-trend and is corrective in nature.
Triangles move within two channel lines drawn from waves A to C, and from waves B to D. A
Triangle is either
contracting or
expanding depending on whether the channel lines are converging or
expanding.
Triangles are overlapping five wave affairs that subdivide 3-3-3-3-3.
