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Crude And S&P500 Moving Into Resistance?


Oct 30 2019
As you may already know, stocks, specifically S&P500 and Crude oil are in positive correlation, maybe not always the perfect one, but cycles are there very similar, only the price move or extensions are sometimes different like now in 2019 per example, as shown on the chart below. What is very important at the moment when looking at this price correlation, is that Crude oil is much weaker than S&P500 that can be also seen in the OIL/SPX ratio chart, which is clearly bearish now down for wave five of C.

Well, looking at the current S&P500 wave count, we are observing a big ending diagonal so resistance can be seen at all-time highs, with limited upside at the upper ending diagonal line for wave 3. If that woudl be the case then we can expect a drop on oil as well, if we cosndier that energy is already much weaker now. From an EW perspective a drop may follow down from a triangle.

Ideal scenario would be something like we have seen last year, when both, stocks and Crude oil sharply fell at the end of the 2018.

Trade well,

EWF Team

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