As much as I love Christmas and year end celebrations, this is not a great time of year for me for one reason. The expectation is that I will write a piece like this, predicting what will happen over the next twelve months. Predicting is what I do, of course, so you would think it would not be a problem, but these year end pieces are different. Usually, I get to state the time frame of a move implied by my research. Some things have an immediate effect that will show itself in a couple of days, while some predictions may be designed to play out over a period of months. Forecasting where any commodity or stock will be at a specific point in the future, though, is virtually impossible given the number of variables at play. Still, it’s the holiday season, so I will have a stab at it anyway regarding WTI.
Traders look forward, but they inform that view by looking backwards. It is therefore impossible to predict anything for 2018 without looking at what happened in 2017.
(Click to enlarge)
WTI started the year looking as if it had found a level, with a couple of months of trading in a tight range just above $50. That ended in March, however, and we spent the next four months forming a giant, five-wave-Elliott pattern downwards that formed a bottom around $42. Then, after OPEC and others agreed to limit production and global economic growth began to pick up, we started a recovery that took WTI past its starting point and into the high $50s, levels…