Volatility Spikes In Energy Markets: Here’s What’s Going On
In this new interview recorded on November 1, Steve Craig, Elliott Wave International's Chief Energy Analyst, tells you about the recent volatility across the energy markets – and what he sees next.
Video Length: 00:02:46
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The text version of this interview is below.]
Alexandra Lienhard: Today on ElliottWaveTV, I have Steve Craig joining me by phone. Steve is the Chief Energy Analyst for Elliott Wave International and he edits EWI’s Energy Pro Service, along with contributing to the monthly Global Market Perspective.
Good morning, Steve. It’s the first day of the month, and I know you’re in the midst of writing your section of the monthly Global Market Perspective, so I appreciate you taking a couple minutes to talk today. Now, let’s jump right into it – how is the energy complex looking to you?
Steve Craig: Hi,Alex. Well, I’m dotting my I’s and crossing my T’s as we speak. I think the big picture view is pretty much all the same. Crude rallied right up to the head and shoulders neckline that I discussed last month and reversed pretty hard from there. Natural gas moved on up into the target zone I had also outlined and then it also reversed very sharply. I think you can make a very strong case that both of those markets have entered into a bear phase.
Alexandra: Now Steve, just to jump in real quickly. There seems to have been increased volatility recently. Anything specific going on?
Steve: It has been interesting this week. Late Monday afternoon the Colonial pipeline, which is really the main line that takes gasoline from the Gulf coast refining centers up to the Eastern U.S. and up to the North -Eastern U.S. had an explosion. We had one similar incident back in early September, and we had a lot of issues with physical delivery of gasoline at the time. They’re saying right now that they should get this pipeline back on by the weekend, so that should mitigate some of the delays to the market.
Alexandra: Now, bringing it back full circle to the technical analysis, what does that mean from an Elliott wave perspective?
Steve: From an Elliott perspective, we had a moonshot today in unleaded gasoline prices. We shot up to about 21.5 cents and then reversed almost the entire length of the advance. And what is interesting is that it’s taken unleaded from kind of a so-so Elliott wave picture to one that looks pretty clean. You can count its wave structure as an ending diagonal, with a big reversal dead ahead. I feel very good about saying that the entire complex has made a turn to the downside, and we’ll see how things develop from there.
Alexandra: Great, thanks, Steve. Looking forward to reading your commentary in the November issue of Global Market Perspective.
Steve: Absolutely. Always my pleasure.
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