You may remember that in our previous Crude Oil Technical Analysis dd. July 29, 2016 we mentioned that it was workable however risky to enter a long position. While 8-Hour chart shows a strong bearish trend, other junior time frames lead their own life.

15-Minute Chart

A bullish correction on smaller time frames started with the gap on July 28-29, 2016. A 3-wave structure on m15 is plotted with orange lines. Despite the classical Elliott’s wave theory, the low of the B correction wave dropped below the starting point of the 1st impulse A wave. Why do we consider this to be possible? If we look at Awesome Indicator of the older time frame 1-Hour (AOx4 on m15 chart), we can see that this bullish correction was supported by an 1-Hour chart. AO of 1-Hour chart was crossed right exactly when the gap happened. And now the 1-Hour chart continues to develop its bullish wave.

crude-oil-m15-chart-2016-08-01

1-Hour Chart

If we see a 3-wave structure on a small time frame, what does it mean on the older time frame? Awesome Oscillator on 1-Hour shows us a new wave up (drawn with a lime line) that may appear to turn into a new A momentum wave. At least the current high on AO outperformed its high related to the previous correction wave on 1-Hour Chart. The current bullish correction clearly seen on m15 and H1 has not yet been confirmed by H4 and older time frames.

crude-oil-1-hour-chart-2016-08-01

Summary of crude oil technical analysis today:

  • 8-Hour is heading down
  • 1-Hour is developing a new A up. Wait for a B bearish correction to be continued by a bullish C.
  • 15-Minute is shaping the 4th wave down to be followed by a 5th wave up within a bigger wave of 1-Hour

 

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