Crude oil is trading lower, and based on the latest decline through the $100 mark and down to $96.00, we suspect that larger picture on this market is changing. For now we will focus on the current structure, which is showing a completed wave B around $103.00 level followed by recent push lower with accelerating price action through $100 mark, which we think it was a wave (iii). Decline should then be made by five waves down. As such, we think that the bounce from the low is just another correction within a downtrend. We are talking about wave (iv) that is pointing lower for wave (v), toward the $95-$94 zone.
We do not look at copper very often, but I see a triangle on the 4h chart, maybe already finished because of recent rally back to $3.318. However, we prefer a $3.3500 breakout on a daily close basis to confirm end of a triangle and further bullish waves up to $3.450, maybe even to $3.500.
Elliott Wave Education: Triangle Pattern
A Triangle is a common 5-wave pattern labeled A-B-C-D-E that moves counter-trend and is corrective in nature. Triangles move within two channel lines drawn from waves A to C, and from waves B to D. A Triangle is either contracting or expanding depending on whether the channel lines are converging or expanding. Triangles are overlapping five wave affairs that subdivide 3-3-3-3-3.
- Structure is 3-3-3-3-3
- Each subwave of a triangle is usually a zig-zag
- Wave E must end in the price territory of wave A
- One subwave of a triangle usually has a much more complex structure than others subwaves
- Appears in wave four in an impulse, wave B in an A-B-C, wave X or wave Y in a double threes, wave X or wave Z in a triple threes