OPEC Agrees on Cut: Wave 4 Corrective Wave Imminent

Apr 2, 2020

Occasionally, news can give us an indication on which Elliot Wave we are undergoing and according to Trump (whether true or not the algos surely acted), that Russia/Saudi's have agreed on a cut of 10 million barrels.

This likely confirms a wave 4 corrective up upwards that will linger for the next 2 to 3 weeks overall, to roughly the 40 dollar range where there remains a gap to be filled.

From the roughly 40 dollar range oil will make new lows through the month of May and could fall to 10 bucks. Extreme and violent moves: welcome to a bear market.

Once we get to Easter, it is highly likely oil will make a violent move down and make new fresh lows. While it seems improbable based on the 25%+ imminent move, it is highly probable that this movement actually occurs.

Stay safe and healthy everyone! Remember that the most violent upwards and downwards moves occur in bear markets - not bull markets.

- zSplit

Apr 2, 2020

Note

FAQ
Q1. Did OPEC really agree on a deal or is this Trump bluster?
Answer: Trump may have indeed lied to redirect discussion away from the historically horrific jobs report, however, algo bots react of news - whether true or not. Remember all that China trade talk news everyday for 24 months?

Q2. You expect the SPX to hit new lows, so now what?
Answer: Correct. However you must note that not everything happens in a day. The upwards moves in the SPX are likely tied to insiders knowing this move in crude would occur. Nonetheless, I expect the SPX to make another leg down in the second half of April.

Q3. So is that it, Crude is going to surge for good?
Answer: Not so fast. The market likes to fill gaps as soon as possible. There remains a gap near the 40.00 range and it is likely over a number of days (or over the next 2-2 1/2 weeks) oil will rise overall to close this gap. Once this gap is filled we can expect new lows. Welcome to a bear market - the most violent upwards and down-moves.

- zSplit

Apr 3, 2020

Note

A commonly asked question I am getting PM's about is "the deal isn't announced".

This is true, no deal has actually been agreed on and claims have surfaced that Trump exaggerated. However, commodities trade on pure algorithmic equations and is an extremely volatile and complex market.

What this means is whether news is true or not has little impact - when the insiders what to pump or dump they find a reason - any ounce of news they can cling onto.

I still expect a gap fill to near $38-40. From there, I expect some additional news to come out (perhaps the deal is off or confirmed Trump lied) and the sugar high will be over and oversupply and lack of demand will rule.

I expect a sharp wave down after the gap fill from near Easter which is likely when the next sell off in equities will be below 1900 on the spx.

- zSplit

Apr 4, 2020

Note

UPDATE

Apparently OPEC has delayed the meeting until Tuesday, Wednesday or Thursday.

We sha'll see how the market reacts to this on Sunday. I suspect crude and equities will fall, however, with the meeting only "delayed" and not "cancelled", perhaps the pullback won't be as significant as it may sound at first glance.

Apr 6, 2020

Note

UPDATE
While the OPEC meeting is "delayed" I highly suspect that it will not be "cancelled". Trump has stated if he has to, he will issue tariffs to save the US shale industry and this should keep the crude loses for Sunday into Monday somewhere between 5 to 7% rather than 10% or more.

I suspect this week will be a modest week of gains in the equity market and this will support crude on any down day. It is unlikely crude will fall much lower until it closes the gap around 38 to 42 dollars. Once this wave 4 is completed we can look at shorting both equities and crude.

While I expect higher crude and equity prices in the near future, crude and equities will likely both test lower lows later this month - or after Easter.

- zSplit

Apr 6, 2020

Note

UPDATE

8:22 am: Oil lower despite hints Russia and Saudi Arabia are ‘very close’ to deal
Oil prices dipped on Monday to reverse earlier gains seen after the CEO of Russian sovereign wealth fund RDIF told CNBC that Moscow and Riyadh were “very close” to a deal.

If this deal happens, this will allow Wave 4 to complete.

If this deal is a lie (who knows?) then the bounce in oil will be "in".