A quick look at the patterns dominating the crude oil price right now.
The market is now overbought at an extreme again.
But that is nothing new for a second wave top.
Just look how bullish producers are according to the latest COT report.
Wave (3) down should begin over the coming weeks.
U.S CRUDE OIL
Crude has dropped off the the morning highs with a fairly sharp move lower.
The extended nature of this rally is bound to cool off at some point,
but the question is;
will the price now finally drop off the highs in a five wave move.
To give us that bearish signal that I have been looking for.
I have labelled todays drop as wave 'i' down,
with wave 'ii' now underway to create a lower high.
If we see a sharp selloff tomorrow in wave 'iii' back towards the previous wave 'iv' low at 61.80.
That will be a good sign that the market has topped out.
A decline in five waves is what this week is all about!
Watch for wave 'iii' of (i) to continue lower.
The high at 64.79 should hold.