Natural gas at 10-week lows, S&P 500 under pressure

Daily Market Analysis (SHORT TERM) Tuesday 08/28/2012

KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (October):

  • Short Term Trends are bullish.
  • Confirmation of a top with a range violation on 08/27/12 @ 112.99. Confirmation of a top with a close violation on 08/27/12 @ 112.26. Downside Target = 107.40 – 106.24.
  • Bearish OVB generated on Monday.
  • October Brent Crude had an impressive initial opening to Monday’s session in overnight trading as fears of devastating production losses from Hurricane Isaac had the market trading higher but those gains quickly evaporated amid rumors of SPR relief and dropped the market to its lowest level in almost two weeks.
  • Look for Brent to break through to new lows for the week on Tuesday in what should be a highly volatile week of trading with a week full of economic data as well as effects from the hurricane.
  • Projected Daily Range: 2.76
  • Projected Weekly Range: 4.32
  • Projected Monthly Range: 13.99

WTI Crude Oil (October):

  • Short Term Trends are bullish.
  • Confirmation of a top with a range violation on 08/27/12 @ 95.40. Confirmation of a bottom with a close violation on 08/15/12 @ 94.33. Downside Targets = 89.82 – 88.74.
  • Bearish OVB generated on Monday. Possible confirmation of a top with a close at $95.40 or lower.
  • October WTI Crude escaped most of the early damage done by news of a possible SPR release as it rallied off the sessions lows to settle just above last week’s lows.
  • Like Brent, we expect his week to be extremely volatile in terms of price action with large intraday swings because of perceived hurricane impacts as well as a slew of economic data points driving a market that has been on the brink of technical collapse.
  • Projected Daily Range: 2.54
  • Projected Weekly Range: 3.76
  • Projected Monthly Range: 11.71

Natural Gas (October):

  • Short Term Trend is bearish.
  • Confirmation of a top with a range violation on 08/27/2012 @ 2.721. Confirmation of a top with a close violation on 08/02/2012 @ 2.979. Downside Targets = 2.612 – 2.563.
  • New lows made on current move Monday @ 2.663. Downside Targets 90% achieved.
  • October Natural Gas followed through on Friday’s extremely volatile and bearish price action to generate new 10-week lows and close below $2.70 for the first time since June 20.
  • Although natural gas may find a little bit of relief from the immense selling pressure it has faced over the past few sessions, any type of bounce will have a tough time closing above Monday’s high and ultimately should work its way back lower toward the October contract monthly objective of $2.652 and possible extended downside target of $2.559.
  • Projected Daily Range: .163
  • Projected Weekly Range: .239
  • Projected Monthly Range: .629

 

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