The bulls took over the control over crude oil in the middle of last month and led its price above $59 per barrel as of today. Despite this strong performance, it looks like it is time for them to retreat for a while. We think so, because of one Elliott Wave pattern, which is visible on the 4-hour chart of crude oil.
The pattern we are talking about is the triangle in wave 4 of (3/C). Triangles precede the last wave of the larger sequence. In this case, the last wave, or the “thrust” as Ralph Nelson Elliott called it, is wave 5 of (3/C). Once it is over, we should expect crude oil to go down, because wave (3/C) already has a complete five-wave structure. According to the Elliott Wave Principle, every five waves are followed by a correction in the opposite direction. Here, it could be just a small wave (4) or a larger decline. In both occasions, we should expect weakness.
