Oil could see $80 in light trading session

Daily Market Analysis (SHORT TERM) Tuesday 10/30/12


KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

ENERGIES

Brent Crude Oil (December):

  • Short Term Trends are bearish.
  • Confirmation of a bottom with a range violation on 10/26/12 @ 109.35. Confirmation of a bottom with a close violation on 10/26/12 @ 109.55. Upside Targets = 112.07 – 113.69.
  • VRCB generated on Monday after making new highs on current move @ 110.26.
  • December Brent Crude Oil moved mostly higher on Monday in light trading before settling just a few cents lower yet above the daily mid-range.
  • As Hurricane Sandy bears down on the Eastern Seaboard Monday evening, look for volumes to be light again on Tuesday with the NYSE and NYMEX both closed again and look for oil to move lower over the next week as demand dissipates.
  • Projected Daily Range: 2.11
  • Projected Weekly Range: 4.87
  • Projected Monthly Range: 12.02

WTI Crude Oil (December):

  • Short Term Trends are bearish.
  • Confirmation of a top with a range violation on 10/22/12 @ 90.18. Confirmation of a top with a close violation on 10/19/12 @ 90.44. Downside Targets = 86.82 – 85.38
  • Bearish OVB generated on Monday making new lows on current move @ 84.66.
  • December WTI Crude Oil led the oil complex lower on Monday as it generated new three-month lows while once again breaking $85 in a light trading session because of the closure of the NYMEX.
  • Expect WTI to fall lower over the coming days in electronic trading as the market will most likely trade to at least the initial Q4 downside target of $82.95 and possible even lower below $80.
  • Projected Daily Range: 1.55
  • Projected Weekly Range: 5.16
  • Projected Monthly Range: 11.33

Natural Gas (December):

  • Short Term trend is bearish.
  • Confirmation of a top with a range violation on 10/25/12 @ 3.751. Confirmation of a top with a close violation on 10/26/12 @ 3.724. Downside Targets = 3.661 – 3.577.
  • C > HOLB (Close Below Low High Bar) generated on Monday. Possible confirmation of a bottom with a range violation @ 3.852. Possible confirmation of a bottom with a close violation @ 3.852 or higher.
  • December Natural Gas moved back to the upside in a very thin trading session on Monday as electronic traders shifted the market all over the place as it traded up near last Wednesday’s bearish OVB high before settling just above $3.80.
  • With large power outages expected throughout the East Coast, look for any selling opportunity to yield extensive Short Term gains as the supply injections over the upcoming two weeks should be above normal after the large decrease in demand.
  • Projected Daily Range: .127
  • Projected Weekly Range: .301
  • Projected Monthly Range: .624

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