It was an interesting and, more importantly, volatile week for the price of crude oil. It initially fell to $35.20 on Monday, but the bulls regrouped and managed to lift it to $39.82 on Friday. The only thing every trader is interested in is if these violent swings could have been predicted. Well, in our opinion, if you rely on stockpile reports and other news, then the answer would unarguably be “no”. Fortunately, we rely on the Elliott Wave Principle, which warned us about the possibility of a bullish reversal early enough. We, in turn, warned our premium clients, by sending them the following chart on Monday, April 4th.(some of the marks have been removed for this article)
As visible, we assumed crude oil’s decline could be in its final stages and the bulls might return much sooner than most expect. As it turned out, “better safe than sorry” proved to be a good motto in this situation, because blindly relying on the continuation of the current trend is often a bad decision. No trend lasts forever. The next chart shows how crude oil has been developing until Friday, April 8th.
We can hardly ask for more precision. As you can see, crude oil prices have been following almost exactly the same the path as the one proposed by the Elliott Wave principle. A small recovery, followed by more weakness to $35.20, followed by the expected reversal. This was another situation, when the principle Ralph Nelson Elliott discovered more than 80 years ago allowed us to predict consecutive market swings in both directions. An ability, most forecasting methods can never offer.
What to expect from now on? What is the bigger picture saying? Is crude oil going to continue even higher or the resistance near 39.80 would turn out to be too strong for the bulls to breach? Prepare yourself for whatever is coming. Order your on demand Elliott Wave analysis now or pre-order the one due out next Monday at our Premium Forecasts section. Stay ahead of the news in any market with the Elliott Wave principle.