KEY TERMS
OVB Outside Vertical Bar
VRCB Volatility Reduced Compression Bar
Brent Crude Oil (August ‘13):
- Short Term Trend is bullish.
- Confirmation of a top with a range violation on 06/20/13 @ 105.10. Confirmation of a top with a close violation on 06/20/13 @ 102.15. Downside Targets = 101.07 – 100.35.
- New lows made on the current move Friday @ 100.04
- August Brent Crude initially broke through the previous weeks’ high early in last trading week to impact the 20-week moving average before falling over $6 in the last two sessions to once again trade near the $100 level.
- Given that Brent has had a 62+% correlation with the S&P this year on losing day’s in the stock market resulting in down days in the oil market, expect for an volatility pop early in the week to be short-lived as the risk asset classes are likely to see additional selling to make one last push towards establishing an annual low.
- Projected Daily Range: 2.69
- Projected Weekly Range: 5.60
- Projected Monthly Range: 8.97
WTI Crude Oil (August ‘13):
- Short Term Trend is bullish.
- Confirmation of a top with a range violation on 06/20/13 @ 97.64. Confirmation of a top with a close violation on 06/20/13 @ 96.63. Downside Targets = 93.43 – 91.89.
- August WTI Crude Oil was unable to break through the $100 mark this past week as a deleveraging of the risk markets saw the oil complex suffer its largest one-week drop in over 2 ½ months.
- As volatility picks up, look for a short-covering move back near last week’s mid-point ($96.17) before fresh selling returns to once again make a push into the $90-$92 support zone.
- Projected Daily Range: 2.58
- Projected Weekly Range: 5.14
- Projected Monthly Range: 9.15
Natural Gas (August ‘13):
- Short Term Trend is bearish.
- Confirmation of a bottom with a range violation on 06/21/13 @ 3.854. Confirmation of a top with a close violation on 06/21/13 @ 3.793. Downside Targets = 3.638 – 3.584.
- Confirmation of a top with a range violation @ 3.854. Confirmation of a top with a close violation @ 3.793.
- August Natural Gas broke lower in the second half of the trading week during this last week’s action as a slightly better than expected injection into storage pressured the market to settle below $3.80 for the second consecutive trading week and beat year ago injections by 50%.
- Natural gas has recently shown a little resilience between $3.80 and $3.75 so traders will need to see early week selling or else risk the possibility of a double bottom forming.
- Projected Daily Range: .114
- Projected Weekly Range: .272
- Projected Monthly Range: .614
About the Author
KMH is a trading and technical analysis firm that specializes in commodity futures and commodity based ETF’s. Kris Hicks has worked for numerous years in the commodity business and in 2011 accurately forecasted both $25 moves to the downside in May and July and the $25+ move to the upside in October in oil. He also called the all-time high day for gold on Sept. 6, 2011 and forecasted a projected downside target of 1528.10 in March 2012. He was also responsible for projecting the Q2 and Q4 low in the Euro FX to within 13 and 9 ticks, respectively. His trading methodology has a high degree of accuracy which confirms tops/bottoms, projected trading ranges and projected targets for those ranges. His expertise is focused on 16 commodities plus the comparable ETF markets. You can reach Kris at Kris@KMH-Capital.com or visit his website at www.KMH-Capital.com.