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COVID-19 returned with a new force in Europe after the warm summer months. Countries around the continent have entered new lockdowns in an attempt to curb the virus’ spread. The situation in the U.S. has never been worse with roughly 200 000 cases per day. But unlike during the first wave of measures, crude oil is actually rising this time.
The price of crude oil is up 35% in November. It’s recovery, which Elliott Wave analysis helped us prepare for in advance, began from $33.78. However, picking tops and bottoms has never been our preferred trading strategy. Instead, we think joining the trend after a reversal is actually in place makes a lot more sense. With that in mind, we sent the following chart to subscribers on Wednesday, November 4th.
The chart revealed a complete corrective decline, labeled a)-b)-c), from $43.84 to $33.78. We though that as long as the latter held, targets above $44 a barrel were plausible. The Elliott Wave logic behind our bullishness was simple.
Crude oil has been rising prior to this three-wave decline. According to the theory, once a correction is over, the larger trend resumes. Hence, as long as $33.78 remained intact, it made sense for the price to reach the August top and then some. Three weeks later now, it is approaching $46.
$33.78 was far from danger the whole time. The bulls took off almost right away and never looked back. The August top was exceeded yesterday. Today’s additional gains bring this setup’s return to 19.5% since November 4th. Judging from the recent COVID-19 developments, traders would never have caught that move. Elliott Wave analysis, though, helped us see it coming.
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