Potential Wedge Formation In Crude

Crude oil is likely to remain within the pale green trend channel to the upside. There may be some diagonal forming in the oil Elliott wave structure. It could be either a leading or an ending diagonal. Moreover, an expanding and contracting variation of both diagonals is possible at this point. We have depicted both scenarios in our very first chart below. Another leg on the upside follows within the black scenario whereas the red scenario depicts a cycle turn at the beginning of July 2018.

We assess the highest odds to the black scenario. Moreover, the second highest odds scenario is actually that minor wave 5 of the black scenario only completes minor wave 1 and extends to the upside. This scenario is not depicted on our very first chart below. However, it is depicted on the other charts further below.

The red scenario stands at lower odds for us. However, it is perfectly possible. We depicted it graphically to raise our awareness that the party could be over already. Sentiment and positioning are at elevated levels, which suggest that we are near a cycle turn in crude. The current swing down from the July high counts as a three-wave corrective move to the downside right now. Odds would shift towards the red scenario if the current swing morphs into a motive wave!

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