USOIL: Market Structure Hints to Fresh Highs

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The current intermediate-term structure on WTI hints to a (W)-(X)-(Y)-(X)-(Z) triple zigzag pattern.

The complex combination is part of a double combo Ⓦ-Ⓧ-Ⓨ, which is part of a cycle degree formation. Wave c is the third part of a potential a-b-c-d-e triangle originating back at the Dec 2018 low of 42.30.

At the time of writing, the last leg of the intermediate wave (Z) is being formed in an A-B-C zigzag fashion. This will complete primary wave Ⓨ and could trigger a reversal down to wave cycle wave d.

C waves of standard zigzags usually extend into an equal impulse A. That seems to suggest that 62.86 could make a good target for profit-taking and a potential reversal.

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A bird’s-eye view provides us with an alternative scenario to the standard zigzag, which looks even simpler from a structural perspective.

According to this scenario, the recent bullish correction is seen as a standard zigzag (A)-(B)-(C) and not as a triple combination. Intermediate wave (A) hints to a leading triangle, whereas wave (B) is a corrective triangle, and C is expected to be a 5-wave move.

Intermediate wave (C) could end near 64.97. At that level, impulse (C) will be at the 161.8 Fibonacci extension of wave (A), a common target.

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