Daily Market Analysis (SHORT TERM) Wednesday 08/22/2012
KEY TERMS
OVB Outside Vertical Bar
VRCB Volatility Reduced Compression Bar
ENERGIES
Brent Crude Oil (October):
- Short Term Trends are bullish.
- Confirmation of a bottom with a range violation on 07/27/12 @ 106.19. Confirmation of a bottom with a close violation on 07/27/12 @ 106.47. Upside Target = 114.37 – 118.06.
- New highs made on current move Tuesday @ 115.58. Final Upside Target 80% achieved.
- October Brent Crude traded to new 3 month contract highs on Tuesday but was unable to close above $115 as a late day decline helped settle the market below the daily mid-range.
- Look for a risk off sentiment heading into Wednesday’s EIA storage report and the final FOMC minutes release before the fall Jackson Hole meeting.
- Projected Daily Range: 1.94
- Projected Weekly Range: 4.84
- Projected Monthly Range: 13.99
WTI Crude Oil (October):
- Short Term Trends are bullish.
- Confirmation of a bottom with a range violation on 08/15/12 @ 94.15. Confirmation of a bottom with a close violation on 08/15/12 @ 94.33. Upside Targets = 98.20 – 101.26.
- October WTI Crude was able to log another day of gains on Tuesday, trading to its highest level in over 3 months before running into resistance at the daily RBB just shy of our extended upside target of 98.20.
- As noted in last night’s report, the daily rate of change is beginning to move to bearish and Tuesday’s close could indicate that the market may start a 10% drop in price so long as there is not a massive draw in inventories in tomorrow’s EIA report.
- Projected Daily Range: 1.54
- Projected Weekly Range: 4.38
- Projected Monthly Range: 11.71
Natural Gas (September):
- Short Term Trend is bearish.
- Confirmation of a top with a range violation on 08/02/2012 @ 3.122. Confirmation of a top with a close violation @ 2.979. Downside Targets = 2.871 – 2.790 – 2.612**.
- Possible confirmation of a bottom with a range violation @ 2.849. Possible confirmation of a bottom with a close violation @ 2.849 or higher.
- September Natural Gas closed Tuesday’s session near the weekly highs after a day of high volatility seeing the market go from its session high to the low and the back to highs once again.
- If natural gas breaks through last week’s high of 2.848, it will signal an end to the 3 week selloff and could lead to a short term rally back to 2.947 before heading back lower.
- Projected Daily Range: .103
- Projected Weekly Range: .330
- Projected Monthly Range: .629
METALS
COMEX Gold (December):
- Short Term Trends are bullish.
- Confirmation of a bottom with a range violation on 08/17/12 @ 1622.10. Confirmation of a bottom with a close violation on 08/20/12 @ 1623.00. Upside Targets = 1644.20 – 1657.20.
- New 3 month highs made on Tuesday @ 1643.60. Upside Targets 99% achieved.
- December Gold blew through the previous 3 months highs on Wednesday after reversing the Short Term trend to bullish and looks to challenge the $1650 threshold it has not traded through since early May.
- Our intermediate term upside target remains 1721.90 and we expect this target to be hit by the end of September if not sooner.
- Projected Daily Range: 17.10
- Projected Weekly Range: 33.90
- Projected Monthly Range: 105.00
CURRENCIES
Euro FX (September):
- Short Term Trends are bullish.
- Confirmation of a bottom with a range violation on 08/14/2012 @ 1.2379. Confirmation of a bottom with a close violation on 08/21/2012 @ 1.2451. Upside Targets = 1.2623 – 1.2699.
- The September Euro FX finally broke out to the upside on Tuesday as investors saw new signs of life from the possibility of the ECB printing more money to backstop the Eurozone, causing the market to close at its highest level since before the July 4th holiday.
- Should the ECB actually act on these presumptions, this market could continue to extend itself higher towards our Q3 objective of 1.2797.
- Projected Daily Range: .0104
- Projected Weekly Range: .0203
- Projected Monthly Range: .0601
INDICES
E-Mini S&P (September):
- Short Term Trends are bullish.
- Confirmation of a bottom with a range violation on 08/03/12 @ 1387.75. Confirmation of a bottom with a close violation on 08/03/12 @ 1387.75. Upside Targets = 1401.25 – 1414.25.
- Bearish DOUBLE OVB generated on Tuesday after making new contract highs @ 1424.75.
- The September S&P’s generated one of the most bearish pattern’s in our proprietary trading methodology on Tuesday that occurs less than six times in a trading year per market with back to back outside days that could lead to a sharp drop in the market.
- Should the Fed not hint at more easing to come in the near future or before the presidential election in November, the S&P’s could see a serious decline lower with first downside objectives as low as 1345.
- Projected Daily Range: 10.75
- Projected Weekly Range: 26.75
- Projected Monthly Range: 95.75
