Daily Spotlight: Energies
A weekly summary of one complex, including daily updates of other developments elsewhere.
[pay]As this post’s title implies, I’m reinstating and expanding my coverage of other markets. Each day will focus on a different complex (the schedule is at the bottom of each post). Soon more coverage within each complex will be added, and Softs will be added on Fridays.
[pay]Crude Oil, Oct (CLV): A two-week old, $3.60 corrective bounce lasted only three days. But it was the longest and largest of a nearly $13, three-week long drop. The bounce long ago stopped gaining ground, but it has yet to resolve down.
Rather, a narrowing range has repeatedly probed the consolidation’s ~75.00 upper-end. A gap under 72.00 remains outstanding (circled red) to attract price back down. But its attraction cannot prevent more probes above ~75.00. Closing back under 73.25 would warn the decline had resumed, signaled under 72.75.
This week’s EIA report is delayed until Thursday due to Monday’s holiday. A more serious probe above 75.00 that is reversed through the close – or through Friday’s close – should extend the reversal to new lows.
Natural Gas, Nov (NGX): A long, drawn-out decline to new lows reached a critical target at its low. Sideways ranging since then has twice tested the low, once holding a probe below it.
A gap outstanding to Friday’s 4.16 close was left outstanding by Tuesday’s gap down. Wednesday’s inside day already undermines the credibility of any trending attempted Thursday. EIA reporting mid-morning is a likely catalyst to spark a trending attempt whose durability can reveal the sponsorship’s strength.
Intraday weakness below prior lows would probably need time into next week to be absorbed, regardless of whether it were recovered through the close. A failed intraday rally would make one more new low likely.
Dollar Basket, Dec (DXZ): Tuesday’s rally to resistance at 83.25 (basis Dec) retraced immediately to test 82.85-82.95 support. Its break on a closing basis would trigger the decline’s resumption, extending into a new downleg.
30-year Treasury, Dec (USZ): Ranged narrowly.
Gold, Dec (GCZ): Second consecutive inside day while testing resistance. Trending attempted from an inside day is often proved to be a false breakout. Such a probe of higher highs would fit the narrative of an extended corrective bounce, so long as the probe failed to hold through the close or through Friday’s open.
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Share your questions and comments in this blog post’s Comments section, or during the chartroom’s What’s Next morning market tour, and in the day’s end Markets on Close…
Weekly Spotlight coverage’s schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).