Thursday, 24 March 2016

WTIC oil - unable to hold $40

Most notable today, price action in WTIC oil, which battled hard to hold the $40 threshold, but fell apart in the afternoon, settling -$1.43 (3.5%) at $39.79. On any fair outlook, Oil is close to a key mid term top, and looks set for renewed broad downside into the summer, as the over-supply issue remains entirely unresolved.

WTIC, weekly2

WTIC, daily


Note the current green candle on the weekly cycle, still indicative of broader upside. Weekly upper' bol is in the $44s...  but will cool to the $43s next week.

The daily cycle offers clear resistance at the 200dma in the mid $42s

Regardless of near term price action, the bigger issue is one of over-supply. That has not in any way been resolved.. and thus I am seeking new multi-year lows in the months ahead.

I'd argue its not whether we'll see WTIC Oil in the teens, but for how many days, weeks.. or even months, will it trade there?

As for equities...


The equity bears can start getting mildly excited once we see the first blue candle. As was the case from Nov-Dec', before <1810, price action will likely see a fair few swings (across 3-5 weeks) before a break of the Feb'11 low of 1810.

In any case, first downside target (via daily charts) is the 50dma/lower daily bollinger. In early April, that will be in the sp'1950/60s.

Looking ahead

Thursday will see the weekly jobs, and Durable goods orders.

With Friday CLOSED, expect increasingly minor chop into the late afternoon, and such light action generally favours the equity bulls.

*Fed official Bullard will be speaking, and Mr Market will be listening, as chatter of a 'Yellen revolt' increases.

Goodnight from London