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Oil finds solid support at $94.50, markets waiting on payrolls

Daily Market Analysis (SHORT TERM) Thursday 09/06/12

By

September 6, 2012 • Reprints


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 08/31/12 @ 113.45. Confirmation of a bottom with a close violation on 08/31/12 @ 114.57. Upside Target = 122.19 – 124.11.
  • C < LOHB (Close Below Low High Bar) generated on Wednesday. Possible confirmation of a top with a range violation @ 112.72. Possible confirmation of a top with a close @ 112.72 or lower.
  • October Brent Crude did follow through on yesterday’s bearish price action and traded below $113 but failed to maintain any intraday rally and settled below the day’s mid-range.
  • Based on the slew of economic data points being released throughout the day on Wednesday, the Brent trade could feasibly go either direction but it is important to note that the previous two sessions price action have been decisively bearish and point to a downside weekly target of $111.21.
  • Projected Daily Range: 2.11
  • Projected Weekly Range: 5.44
  • Projected Monthly Range: 1305

WTI Crude Oil (October):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 09/04/2012 @ 96.93. Confirmation of a top with a close violation on 08/30/2012 @ 94.62. Upside Targets = 100.04 – 101.56.
  • October WTI Crude Oil broke to make new lows on the week in early session trading but was able to find solid support below $94.50 and generated a triple bottom on intraday charts before rallying in the last few hours of trading to last trade just off the session’s highs.
  • Following the consistent level of bull market support and Wednesday’s strong finish, look for WTI to finally make a move back above $97 should economic indicators not issue large misses in both employment and ISM readings.
  • Projected Daily Range: 2.15
  • Projected Weekly Range: 5.04
  • Projected Monthly Range: 10.76

Natural Gas (October):

  • Short Term Trend is bearish.
  • Confirmation of a bottom with a range violation on 08/31/2012 @ 2.768. Confirmation of a bottom with a close violation on 08/31/2012 @ 2.799. Upside Targets = 2.836 – 2.915.
  • Inside compression day generated on Wednesday. Possible confirmation of a top with a range violation @ 2.761. Possible confirmation of a top with a close @ 2.761 or lower.
  • October Natural Gas dropped back lower on Wednesday as the four day and $0.27 rally fizzled ahead of the EIA Storage number release on Thursday.
  • The outlook on natural gas still remains bearish and if the storage numbers on Thursday support our outlook, traders should expect last week’s low of 2.610 to fail and see another 2-3 weeks of lower prices.
  • Projected Daily Range: .105
  • Projected Weekly Range: .185
  • Projected Monthly Range: .665

METALS

COMEX Gold (December):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 08/31/12 @ 1679.40. Confirmation of a bottom with a close violation on 08/31/12 @ 1679.40. Upside Targets = 1721.90 – 1728.70.
  • Inside VRCB generated on Wednesday. Possible confirmation of a top with a range violation @ 1687.50. Possible confirmation of a top with a close @ 1687.50 or lower.
  • December Gold had a very thin trading session on Wednesday and settled mildly lower on the day ahead of the numerous economic data reports due out tomorrow including employment and ISM readings.
  • Look for tomorrow’s economic data to drive market direction with price action slightly bullish.
  • Projected Daily Range: 23.70
  • Projected Weekly Range: 50.10
  • Projected Monthly Range: 126.40

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 reversed its overnight losses on Wednesday after holding last week’s low and then rallied higher back above 1.26, just below Tuesday’s high.
  • Wednesday’s price action indicates that the market should continue to move higher after ECB head Draghi reiterated that it will do whatever it takes to keep the Euro solvent and may push this market back higher towards the Q3 target of 1.2797.
  • Projected Daily Range: .0113
  • Projected Weekly Range: .0200
  • Projected Monthly Range: .0532

INDEXES

E-Mini S&P (September):  

  • Short Term Trends are bullish.
  • Confirmation of a top with a range violation on 08/23/12 @ 1404.00. Confirmation of a top with a close violation on 08/23/12 @ 1400.00. Downside Targets = 1387.50 – 1375.50.
  • Inside compression day generated on Wednesday. Possible confirmation of a bottom with a range violation @ 1409.75. Possible confirmation of a bottom with a close @ 1409.75 or higher.
  • The September S&P’s had another choppy trading session on Wednesday in a compressed trading range while settling just above the day’s mid-range.
  • Unless the economic data points severely disappoint, the S&P’s should see a large move higher to end the week and possibly track down the contract highs of 1424.75.
  • Projected Daily Range: 14.25
  • Projected Weekly Range: 35.75
  • Projected Monthly Range: 80.25
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