CRUDE OIL (CL SPOT)
On November 3, crude oil broke above resistance of $55.24 from the high of the first week of this year. Perhaps even more important is the simultaneous breakout of resistance at the confluence of two wave interference patterns:
Wave interference patterns are generated from the intersection of two (or more) sets of concentric circles interacting (emanating, usually from an important reversals), akin to dropping two stones into a pond.
The line patterns shown here (solid lines) are made by connecting such intersections using specific relationships: 1×1 (black) and 4×1 (brown). Although line patterns can start anywhere, the examples shown are selected due to their alignment with price.
While crude is still recovering from the major low of Jan./Feb. 2016, formed at the 4×1 pattern (brown), this month it managed to cross above resistance at $54.90, from the critical mid-line (black dashed angle). Note previous resistance from this mid-line at point B, causing the final leg of the downtrend to support. However, the month is only half-finished. Time will tell if the month closes above $54.90.
Note the double-top at the black resistance pattern of 1×1, whose continuation downward shows potential resistance around $75-$87, at the time the current market may reach it. But, the $75 price level of the 1/2 point (dashed black horizontal) stands in the way of a full recovery back up to the resistance curve. Notice its prior effectiveness as support at point A.
