Swap dealers net-short crude. What does it mean for your trading?

Market Pulse: Nov 21, 2011

Last week the Energy Information Administration (EIA) showed another drop in U.S. crude inventories to 337 million barrels. That is 20.6 million barrels less than a year ago.

Last week, January 2012 crude opened at 99.06 and closed the week at 97.67. The high last week came in at 103.37. On the daily chart you see that this market has been in a strong uptrend since the first week of October with ADX at 49. Also, you see in the first week of October that MACD crossed the signal line adding solid divergence reflecting that the move up had momentum. Currently, MACD has dropped all divergence and looks to be getting ready to cross below the signal line. During the first week of October, you can see that Stochastics started correcting from oversold territory and quickly became overbought. The deep overbought condition lasted for some time until last week, where we see a correction taking place.

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