Oil weakness brings $80 target into play

Daily Market Analysis (SHORT TERM) Thursday 11/08/12


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 11/06/12 @ 110.27. Confirmation of a bottom with a close violation on 11/06/12 @ 110.27. Upside Targets = 112.48 – 114.73.
  • Bearish EROVB (Extended Range Outside Vertical Bar) generated on Wednesday after making new highs for the week @ 111.64.
  • December Brent Crude sank lower in Wednesday trading as a combination of supply increases domestically because of demand depletion from Sandy compounded with pessimistic investor sentiment regarding the fiscal cliff pushed the market back near last week’s low as the market dropped more than $5.
  • Brent was significantly oversold on Wednesday and should see a pop back to the upside in early trading on Thursday near $109 before resuming the downward price action heading into the weekend.
  • Projected Daily Range: 2.61
  • Projected Weekly Range: 4.63
  • Projected Monthly Range: 10.65

WTI Crude Oil (December):

  • Short Term Trends are bearish.
  • Confirmation of a top with a range violation on 11/07/12 @ 84.33. Confirmation of a top with a close violation on 11/07/12 @ 84.33. Downside Targets = 81.36 – 78.69.
  • December WTI Crude Oil fell sharply lower on Wednesday as the “risk-off” trade dominated the marketplace as WTI closed at its lowest level in four months.
  • Like Brent, WTI should move a shade higher in early trading on Thursday before resuming the two-month long sell-off as the market threatens the $80 threshold.
  • Projected Daily Range: 2.16
  • Projected Weekly Range: 4.26
  • Projected Monthly Range: 10.61

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 = 3.501 – 3.476.
  • Inside VRCB generated on Wednesday.
  • December Natural Gas moved mostly lower throughout trading on Wednesday as the energy sector as a whole was dragged down on concerns over the impending U.S. fiscal cliff as well as lowered GDP expectations for Europe.
  • Although natural gas was able to garner a modest two-day reprieve from the previous weeks of selling, the markets price action today along with what should be a large injection number on Thursday should suppress any bullish tendencies that exist and push this market back lower to fill to previous spreads.
  • Projected Daily Range: .119
  • Projected Weekly Range: .314
  • Projected Monthly Range: .624

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