It was not the best start of a week for crude oil. The commodity’s price fell to 43.02 dollars a barrel on Tuesday, May 10th, and the bears were getting ready for a feast. However, it was not meant to be, since prices quickly reversed to the north and two days later – on Thursday, May 12th – climbed to the 47.00 mark. Could the resumption of the uptrend be predicted? Yes, and it was. Before the markets opened on Monday, May 9th, our premium clients received the following chart.(some of the marks have been removed for this article)
By using the Elliott Wave Principle, we managed to form a bullish opinion on crude oil prices and identify an invalidation level, which, if broken, would tell us we were wrong right there and then. The forecast said that “as long as the bottom … at $42.47 holds, a new top could be expected.” The next chart shows oil’s path during the last five days.
As visible, the price of oil did not go straight up. The initial weakness to 43.02 was not very pleasant for the bulls. However, 42.47 was still intact, so all we had to do is be patient, sit on our hands and wait for the forecast to develop. Today is Friday, May 13th. The invalidation level, suggested by the Wave principle was never touched. Instead, a new top has been reached, which is exactly what we wanted in the first place.
A hint of the market’s intentions and an invalidation level is all a trader needs. The first one is provided by a countless number of methods. But the Wave principle is among the very few to provide the second. That is just one of its characteristics, which make it so valuable to traders and also one of the reasons we rely on it. We believe it could be a priceless addition to your trading arsenal as well.
What to expect from now on? What is the bigger picture saying? Is crude oil going to continue even higher or the resistance near 47.00 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.