Crude Cycles Project 6 – 12 Month Bottom; 2 – 3 Year Support Reached… Rally into May ’19 Likely!

Crude Cycles Project 6 – 12 Month Bottom; 2 – 3 Year Support Reached… Rally into May ’19 Likely!

01/04/19 INSIIDE Track: Crude Oil, Unleaded Gas & Heating Oil have plummeted since fulfilling a powerful convergence of cycles in late-3Q 2018.  Late-Sept. ‘18 ushered in a projected shift in Middle East cycles and coincided with weekly, monthly, yearly and multi-decade cycles in Crude – all colliding between late-Aug. – early-Oct. 2018.

At the time, Crude attacked its 2018 upside target (75.00 – 77.30/CL; most synergistic at 76.45 – 77.05/CL) – peaking at 76.90/CLX, while fulfilling a ~16-month low (Feb. ‘16) – low (Jun. ‘17) – high (Oct. ‘18) Cycle Progression.  That ~16-month advance broke down into an ~8-month low (Nov. ‘16) – low (Jun. ’17) – low (Feb. ’18) – high (Oct. ’18) Cycle Progression.

Simultaneously, that fulfilled 10-Year & 5-Year Cycle Progressions that projected a 1 – 2 year (or longer) peak for 3Q 2018.  That ~5-Year Cycle is one of the most consistent in Crude and is reinforced by the overriding ~10-Year Cycle.  Crude peaked while completing successive 15-week/~15.0 point advances and has since plunged – reaching 2 – 3 year support around 42.05/CL

That 10-Year Cycle should also be viewed with respect to lows.  In Dec. 1998 and Jan. 2009, the energy markets completed very sharp or very extended declines and set multi-year bottoms.  10 & 20 years later – in Dec. 2018/Jan. 2019, the energy markets have undergone another sharp sell-off and reached pivotal support.

While this does not automatically signal a major low, it shows that oil markets are entering the time when long-term cycles project a bottom.  That also comes 3 years from the 1Q 2016 bottom – a 3-Year Cycle that has broken down into ~1.5-Year cycles that could produce a low in Dec. ‘18/Jan. ‘19.

Crude peaked and began its most precipitous decline in the June/July 2014 (mid-year) time frame and extended that plunge into Dec./Jan. 2016, ~1.5 years later.  ~1.5 years after that bottom, Crude set a secondary low in the June/July 2017 (mid-year) time frame.  And ~1.5 years after that is Dec. ’18/Jan. ’19, a perpetuation of this ~18-month cycle.

The 32 – 34 Week Cycle – that timed Crude lows in Nov. ’16, Jan. ’17 & Feb. ’18 and subsequently projected/timed the peak on Sept. 24 – Oct. 5, 2018 – comes back into play in the second half of May 2019 and should time another multi-month high.

Energy market cycles have provided critical and revealing clues regarding Middle East expectations.  With Crude Oil fulfilling downside potential from bearish 4Q ’18 cycles and attacking 2 – 3 year support & downside targets at 42.05 – 42.65/CL, the stage has been set for a 6 – 12 month bottom in oil prices.

How high could Crude rebound in 1Q/2Q 2019?  The next phase of Crude’s 32 – 34 Week Cycle Progression – that projected a multi-month peak for late-Sept./early-Oct. ’18 – is in May 2019 and is likely to time the culmination of Crude’s early-2019 advance.

Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.