Crude Oil Flashback Update: Wave (5) May Be Approaching Its End

We discussed crude oil on October 19, when prices were stabilizing around the important $88 support zone, which marked the July swing high on the continuation-adjusted contract. At the time, our Elliott Wave analysis suggested that the decline was forming an A-B-C correction within wave (4), potentially completing with an ending diagonal in subwave C. As anticipated, this support area provided a foundation for the next bullish move.

Crude oil subsequently rallied within the projected wave (5), reaching our updated target area around $103–104, where the market is now showing a sharp reversal. With the fifth wave potentially approaching completion, we should be aware of limited upside and the possibility of a higher-degree slowdown. A decisive move back below $97 would provide additional confirmation that resistance may be in place, opening the door for a corrective decline toward the $95–97 area or potentially lower.

Intraday Elliott Wave Outlook

Looking at the intraday chart, crude oil rallied strongly into the projected fifth wave and reached the previously mentioned $103–104 triangle target area. From this zone, price has turned sharply lower, suggesting that resistance may now be in place, at least temporarily.

We should therefore watch for a reversal lower in a minimum of three waves, with an initial downside target in the $97–95 area or potentially even lower. While the current price action raises the possibility that wave (5) is approaching its end, a decisive move back below $97 would provide further confirmation that a more significant corrective phase may be developing.

Our October 19 analysis anticipated the recovery from $88, and price has since advanced into the projected target zone. Now, the focus shifts to whether the fifth wave has completed and crude oil is ready for a larger corrective setback.