THEN, the day chart for the Crude Oil Futures using the February 2014 contract, to view the original analysis for 1/13/14, click here for that post,  price was testing a significant level at 92.05 and there was a key resistance level at 99.32 being a target with a hold above 92.05 and with a hold below 92.05 there were downside targets at 86.64, then harmonic pattern targets at 79.99 and 71.54.

NOW, almost a year later, we are in a different contract of course, because CL rolls to a new contract every month, but the harmonic scenario remains the same.  I’ve noted what the “THEN” levels were in correlation to the “NOW” levels on the chart.

So As you can see, price has exceeded those targets but notice that once price did break down the Significant level of current contract 80.27, there has been a stall at the Butterfly and Crab completion targets.  Now, in the world of harmonics which is intertwined with Fibonacci’s, there are extension targets for that Crab, which I’ve noted on the NOW chart.  Price is approaching the 48.57 to 46.07 zone.

Providing price tests the 48.57 zone target, what happens next is key.  Failure to bounce there and go into retracement mode has the most extreme target for the Crab at 37.54.  Now anything below there outside of a small breach, pretty much much says thanks to the pattern for offering us downside targets, but not ready to bounce at this juncture.

That’s only one of the cool things regarding harmonic patterns, they are considered targets in a trending movement until their completion, then they offer reversal targets.  So I’m watching for a test of the green zone between 48.57 to 46.07, once price can hold above it, it increases the probability of testing those levels it recognized on the way down and each level price can hold above offers increased probability of upside continuation to the next level.

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