Crude Oil Recouped the Omicron Losses. Here’s Why

Crude oil recouping Omicron Losses

What will Crude Oil bring next week? That is the subject of discussion in our next EW PRO analyses due out late Sunday!

It’s been roughly a month since the new Omicron variant emerged and threatened to bring back curbs to slow its spread. The initial impact on the price of crude oil was a dramatic decline to $62.23 on December 2nd. Yesterday, however, and despite new anti-Covid measures across Europe, WTI reached $77.15.

In other words, almost all the losses caused by the Omicron scare have now been recouped. The good news is that traders didn’t have to pay attention to every Covid-related news article in order to predict crude oil ‘s rise. All they had to do was look at the hourly chart below through the lens of the Elliott Wave principle.

Crude oil hourly Elliott Wave chart, December 20th.

The chart above was included in our December 20th premium analysis. It showed that the recovery from $62.23 to $73.13 was a five-wave impulse pattern, labeled i-ii-iii-iv-v. Every impulse is followed by a three-wave correction before the trend can resume. This meant the following weakness was most likely a w-x-y retracement.

Elliott Wave Setup Helps Crude Oil Defy the Omicron Threat

Wave ‘y’ was supposed to breach the bottom of wave ‘w’ and complete the corrective phase of the cycle. Then it would make sense for another impulsive rally to occur and lift crude oil to a new high above $75 a barrel. The Elliott Wave picture really was that simple. The Covid picture – hardly so. Since we cannot predict the virus’ spread nor governments’ reactions, we decided to focus on the charts instead. Ten days later now, we have no regrets about that decision.

Crude oil fulfills Elliott Wave setup

Wave ‘y’ ended at $66.04 the very same day. Crude oil then climbed in every single session during the next six days. On December 29th, the price reached $77.15 after what also appears to be an impulsive surge.

Initial analyses suggest Omicron is causing milder illness than previous variants, which is good news for everyone. Is this already discounted in the price of oil? Hard to tell, but the bigger Elliott Wave picture is already giving us a hint of what to expect next.

What will Crude Oil bring next week? That is the subject of discussion in our next EW PRO analyses due out late Sunday!

New to Elliott Wave?

Elliott Wave principle offers a completely new understanding of what the nature of the markets is, what drives them and what can be derived from their movement. This course is for those of you, who have been looking for an honest Elliott Wave guide, describing the method’s advantages over other trading tools, but not hiding its weaknesses.

Check Video Course    or     Check our eBook


See our Video Course
or check our eBook

Last year over 60k readers trusted EWM Interactive to help them in their trading decisions.

I’m very happy i discovered your service. Thanks so much and keep up the good work!

- Xavier N.

Just loving your analysis. Thank you so much, really wished you add some more currencies to your list You have a client for life :)

- J. Kotzee

I love the way EWM does business: response times & overall friendly demeanor are fantastic... and the prices are very fair. The trade recommendations read like like they come from a seasoned trader that is used to winning. Couldn't ask for more.

- C. Montgomery

I love the way EWM does business: response times & overall friendly demeanor are fantastic... and the prices are very fair. The trade recommendations read like like they come from a seasoned trader that is used to winning. Couldn't ask for more.

- C. Montgomery

I’m very happy i discovered your service. Thanks so much and keep up the good work!

- C. Montgomery

Just loving your analysis. Thank you so much, really wished you add some more currencies to your list You have a client for life :)

- C. Montgomery