Oil, gold in “hurry-up and wait” mentality ahead of Bernanke

Daily Market Analysis (SHORT TERM) Friday 08/31/12


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.
  • VRCB generated on Thursday. Possible confirmation of a bottom with a range violation @ 113.45. Possible confirmation of a bottom with a close @ 113.45 or higher.
  • October Brent Crude traded mostly higher on Thursday in another thin trading session before as the market has seemed to work out to the side after Monday’s dramatic drop.
  • Friday’s speech from Jackson Hole will most likely set the tone over the coming weeks to whether Brent falls back to $106.24 or pushes higher with more QE to $122.19.
  • Projected Daily Range: 2.34
  • 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 top with a close violation on 08/30/12 @ 94.62. Downside Targets = 89.82 – 88.74.
  • October WTI Crude continued to fall lower on Thursday and widen the spread between itself and Brent to more than $18 as it made new two week lows.
  • Like all other “risk” markets, WTI’s price action on Thursday becomes almost irrelevant as traders will have a “hurry-up and wait” mentality ahead of Chairman Bernanke’s announcement regarding central bank easing.
  • Projected Daily Range: 2.22
  • 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 08/27/12 @ 2.721. Confirmation of a top with a close violation on 08/02/12 @ 2.979. Downside Targets = 2.612 – 2.563.
  • Bullish ERVB (Extended Range Vertical Bar) generated on Thursday. Possible confirmation of a bottom with a range violation @ 2.768. Possible confirmation of a bottom with a close @ 2.768 or higher.
  • October Natural Gas exploded higher on Thursday back near the weekly highs after a larger than expected builds in inventories.
  • Look for price action similar to last week’s on Friday as the market should move a shade higher towards the weekly highs of $2.792 and then dropping significantly lower back below $2.70.
  • Projected Daily Range: .097
  • Projected Weekly Range: .239
  • Projected Monthly Range: .629

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