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Brent Crude in a consolidation Triangle - will it break up or down?

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It seems clear to me now that Oil is stuck in a large Triangle consolidation move and just now is retesting the lower perimeter and associated support zone.  This is consistent with a wave 3-4 consolidation, which suggests a final wave 5 rally, probably up to $55-60 levels, before, I believe, a final run down to bottom.

 

Of course the alternative scenario is that the top of the current retrace rally has already occurred and this would be confirmed for me on a sustained break of the lower Triangle and support zone.

 

Let's see what happens next...

 



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I now believe the answer is UP.  I see the recent move as a wave 1-2 retrace following a wave 4 completion and now we have a small turn back up.  If this move breaks the near term resistance zone then a rally is on the cards.  going long with close stop protection is a decent bet for me.  Naturally the reverse could still occur at this point...

 



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The key question on Brent Crude is whether the rally since Jan 20166 has topped out at $53 (9 June) or not.  At face value it certainly looks like it could have but the move since then is neither classic EWT 1-2 (preparing for a strong drop) nor A-B-C retrace (preparing for another rally leg).  It is possible that the retrace is just not yet concluded and that the market will chug on down to the $43 area to complete the retrace before putting in another strong rally.  However it is also possible, given the awkwardness of the current move down from the $53 high and the excessive whiplash effect I am minded to think this is a complex wave 4 retrace that completed on 11 July, after which a wave 1-2 was posted and now we are at the start of a wave 3 of 5 up.  If this is true then we should see a strong rally soon.  If not then a break of the small triangle (hourly chart) would indicate a move down.

 

Trading complex retrace waves is tough and dangerous, I will proceed with caution until the break reveals itself...

 



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