Crude Oil Outlook

Hello folks, It has been a busy few weeks as I was spending all my evenings putting together my book. Almost done, now! Between, I noticed that Crude Oil came quite close to the target of $71. Remember we have been bearish on this from the time it was around 110? (when some leading investment banks were calling it to $150).

The outlook for Crude Oil in the near term is for a failure between 88.10 and 89.50 and come down once again. Hopefully, this time we will reach the target of 71 levels. Stops should be placed on two closes above 89.80 Take a look at the attached chart and stay tuned for the announcement regarding the book!

Elliott Wave Analysis of Natural Gas (MCX) India

Elliott Wave Analysis of Natural Gas Futures traded on MCX India. To be honest, this is the first time I am looking at this contract, and what I see is fascinating. There were so many easy opportunities to trade the Natural Gas Futures profitably on the MCX in India!So what do the Waves tell us? First of all, we can see a clear five wave down move on the left of the chart. There was an extended 3rd of the 3rd wave, a move that covered 4.618 times the distance of the first wave. Next, you would have prepared yourself for a complex correction because the 2nd wave was simple. Sure enough, you got an irregular ‘B’ wave. The 4th wave ended nicely at the 38.2% retracement level of the 3rd, and the final 5th wave also finished at a technical level (50% of the distance from 0-3). You would have gone long the Natural Gas futures contract near the end of the 5th wave. There was a bit of choppy correction that ensued, because the B wave also was an irregular correction, but hey-presto, it finished at the 50% retracement level. Anyone who was patient could have loaded up nicely near there (waiting to add at the 61.8% lvls, but which never showed up!). Then we embarked on the “C” wave, which I think has just finihed its own 4th wave, and we are in the fifth wave of this move. So it is rather late in the day to consider buying now. Rather one will watch to see what happens near the 210.60/80 and sell there if the momentum fades. That concludes this short lecture on Natural Gas Futures on the MCX in India. Share it with all those whom you think want to learn how to trade commodities using Elliott Wave Analysis.Update on 29 August 2019:If you love my book FWTFF, then you will love my online course even more! That course will take your understanding of Elliott Waves to a whole new level, because it teaches you how to APPLY what you learn in my book to actually make profits in the markets. Here is the link:

Medium Term Outlook for Crude Oil using Elliott Wave Analysis


Many of you will remember that I had called for a sell-off in the price of Crude Oil from the $140 level to $50 in 2008. (see old posts in Wavetimes, especially how Fifth wave extensions can make you rich!). The main reason for my bearish call at that time was we had completed an extended 5th wave at $147. You are now seeing another such ‘magical moment’ when yet another extended 5th wave has been completed at $114.83. The new target for Oil is now just below $71, which means there is another 26% downside left.

As I never tire of repeating, nothing works like Elliott Wave analysis when it comes to the markets. The trouble is, one has to be alert to recognize the patterns as it is happening. For example, I could have warned you of the top if I was watching it every day. Still, it is not too late even here. If Crude gets back to above 104, we would have missed only about $10 of the move. There is still about $25 left even from current levels!

Is it possible that I am wrong? Of course, I could be wrong. But we are working with stops, aren’t we? If you can afford a stop of $3 and make $30 in the bargain, I call that a fair risk-to-reward ratio! In case you are thinking of taking a short position in Oil, I urge you to do the selling in stages. 104.30-70 is one level, but we also have 107 as the 61.8% pull back level. By leaving some room to add there you will be doing yourself a favor should the market decide to turn choppy. But the best way to add to your first position is when it starts moving in your favor. You might not catch the top doing that, but at least you would be trading with the trend! Good luck.

By the way, you can get some of these alerts via twitter, in case you haven’t noticed. Once you sign up, you can share with your friends easily.

Update on 29 August 2019:

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Gold 13 Oct 2009

Gold reaches record highs and first objective

Gold 13 Oct 2009 Almost a month back, I wrote in these pages that Gold will stay bid until it reaches at least 1069, and if sentiment remains strong, we could even see 1161. At that time, the precious metal was trading at 1016. Today, Gold has reached a record high and met that first target at 1069, and has edged back to 1057 as I am writing this special update for you.

If you are an investor, or a trader in Gold, it is vitally important for you to know which direction the metal is heading in the medium term, and estimate how far the move could travel. There are few better tools available to you than a sound knowledge of Elliott Wave Principle. With wave analysis, you will also be able to see any error in judgement much sooner than otherwise. Unfortunately, it takes several years of patient study before one can become deft at calling turns. Even a battle scarred veteran like me makes mistakes. So a beginner has to be really careful. Still, it is worthwhile to study the wave principle carefully.

Today’s chart shows a leading diagonal triangle in Gold. This is a rare formation but, given its position in the progression, the outcome was clear that we would get a smart move higher. Now that we have reached the first target at 1069, it is time to consider whether Gold still has room on the upside. My assessment is YES. If we get a quick dip to around 1040, one should continue to buy. There are more supports near 1020. From one of these supports for Gold, we should expect at least a retest of the highs. Once we get past 1069 by more than a few dollars, a move to 1161 should not be too difficult. However, new trades at these high levels should be for smaller size because of the increasing risk of a sharp reveral once the move is finished. At this point, I would like to share with Gold traders a key point in wave analysis. When a five wave move is finished, the ensuing correction will not only correct the fifth wave, but the entire cycle of five waves. Hence, it will travel a greater distance than either wave 2 or wave 4 in the prior cycle. Wave 4 was 349 dollars. So our correction will be at least 349 dollars. It will serve you well to keep that in mind.

Finally, is it possible that Gold keeps going down, now that we have met the first target? Of course, anything is possible! But given the current sentiment in the market, I think we will remain bid for several days, and even if you buy at 1020-1040 window, you will get enough opportunities to exit at a profit, even if that profit is not going to make you as rich as you will be if gold reaches 1161. In any case, I will try and alert you if something changes while we wait.
Best of luck! Ramki

Update on 29 August 2019:

If you love my book FWTFF, then you will love my online course even more! That course will take your understanding of Elliott Waves to a whole new level, because it teaches you how to APPLY what you learn in my book to actually make profits in the markets. Here is the link: