Risk assets shift attention to QE3 expectations

Daily Market Analysis (SHORT TERM) Thursday 09/13/12


KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (November):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 09/11/12 @ 114.59. Confirmation of a bottom with a close violation on 08/31/12 @ 114.57. Upside Target = 122.19 – 124.11.
  • New highs made on current move Wednesday @ 116.00.
  • November Brent Crude moved sharply higher in overnight trading on the German court ruling yet came up just three ticks shy of last week’s high of $116.03.
  • Although Brent settled back near the daily mid-range, expect it to trade mostly higher throughout tomorrow and possibly break through to new weekly highs until the FOMC announcement. Trading the full weekly range projects to 118.46 by Friday.
  • Projected Daily Range: 1.88
  • Projected Weekly Range: 5.00
  • Projected Monthly Range: 1305

WTI Crude Oil (October):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 09/04/12 @ 96.93. Confirmation of a bottom with a close violation on 09/11/12 @ 97.17. Upside Targets = 100.04 – 101.56.
  • New highs made on current move Wednesday @ 98.06.
  • October WTI Crude Oil initially advanced to its highest level in almost three weeks in early morning trading but failed to close with conviction as it spent most of the trading session hovering just below $97.
  • As is the case with all “risk” assets heading into tomorrow’s Fed announcement, this is one of the days where technicals will take a back seat to emotional reaction to whatever policy changes, if any, Chairman Bernanke delivers.
  • Projected Daily Range: 2.09
  • Projected Weekly Range: 4.60
  • Projected Monthly Range: 10.76

Natural Gas (October):

  • Short Term Trend is bearish.
  • Confirmation of a bottom with a range violation on 09/11/12 @ 2.889. Confirmation of a bottom with a close violation on 09/11/12 @ 2.682. Upside Targets = 3.066 – 3.128.
  • New highs made on current move Wednesday @ 3.068. Upside Target over 125% achieved.
  • October Natural Gas traded just two ticks through the upside price objective listed in Tuesday morning’s report for its third consecutive day of strong gains.
  • After hitting the upside target, look for natural gas to have serious trouble breaking through $3.13 without a massive miss in storage estimates in Thursday’s EIA report.
  • Projected Daily Range: .169
  • Projected Weekly Range: .269
  • Projected Monthly Range: .665

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