S&P 500 shows extreme bearish technical signal

Back to back "outside days" could signal trouble

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

 

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