How Elliott Wave Analysis Predicted the 10% Drop in Crude Oil Prices
Just ten days ago, on August 12th, crude oil prices peaked above $80 a barrel. Fast forward to today, August 22nd, and the price has plummeted to below $72, marking a significant 10% decrease in less than two weeks of trading. While many may attribute this drop to the recent Gaza truce negotiations, the key to success in the market lies in being able to predict these movements before they happen.
At Elliott Wave Pro, we utilize advanced analysis techniques to anticipate market trends before they unfold. Our analysis, published before the markets opened on August 12th, accurately forecasted the selloff in crude oil prices. The chart displayed a clear five-wave impulse pattern, indicating an imminent decline in prices.
Following the Elliott Wave theory, a three-wave correction typically follows every impulse before the trend continues. This meant that the price recovery from $71.70 was likely a temporary retracement, signaling further weakness ahead. By the time we updated our analysis on August 14th, the bearish reversal had already occurred, confirming our initial predictions.
Furthermore, the price reversal coincided with the 61.8% Fibonacci resistance level, reinforcing our belief that a new downtrend was on the horizon. As shown in the updated chart, the situation has unfolded as expected, with prices continuing to decline.
In conclusion, utilizing advanced analysis techniques like Elliott Wave can provide valuable insights into market movements and help traders make informed decisions. By staying ahead of the curve, investors can position themselves for success in the ever-changing financial markets.