We are fearing a large institutional short covered in the August boosting prices.
We are playing the WTI/Brent to widen out from here at $4.50/5.00. (Brent (NYMEX:SCQ14))
After finishing yesterday’s session on the highs crude oil has fluctuated between gains and losses this morning as traders have seen a lack of new developments out of Ukraine or the Middle East.
Still, geopolitical tension around the globe following a volatile week has risk premium still in the market. We have seen the market extend to a new swing high, reaching 103.45 in the September contract; just shy of our two star resistance at 103.58.
Yesterday, the market finished just below our 102.90-102.99 resistance level and a close above here today will leave the bulls in clear control in the short term. Another driving factor this week is the continued delays in Libyan oil hitting the market; in fact it actually fell 450,000 bpd. Only a failure and close back below 102.33 will encourage a consolidation.
Resistance –103.58***, 104.31**, 104.75*, 105.40**, 106.64**
Pivot - 102.90-102.99
Support – 102.33**, 101.34**, 100.84***, 100.34**, 100.00**, 96.82****
E-mini S&P 500 (CME:ESU14)
Look for the market to rally highs early
Equities are back up this morning as we yesterday’s slight pull back proved once again to be a buying opportunity. Earnings from the likes of Chipotle and Netflix crushed expectations as investors turn to Apple and Microsoft today. Overall, strong earnings has helped investors focus on the components of the indices rather than the geopolitical tension and/or the Fed.
The S&P 500 closed yesterday at 1966.25, above the 1965.50 level we said to watch on a closing basis; a continued close above here will keep the bears in control. The major focus this morning will be CPI data which investors don’t want to see too big of a jump, this would put inflation and Fed raising rates back onto center stage. We also have Existing Home Sales which will be straightforward. A close back above 1971.75 will leave the bulls in clear control while a close above resistance and previous highs at 1976-1978.25 is needed to encourage a new leg to test 2000.
Resistance- 1971.75*, 1976-1978.25**, 1983.75**, 1998.25****-2000
Support –1965.50*, 1959.75*, 1952.50-1954***, 1947.25**, 1936.50-1938***, 1933.75*, 1929.75-1931**, 1924*, 1917-1919***