Next Key Downside Level for Crude Oil - Commodities Comment
As
the US Existing Home Sales release this morning showed sales climbing
to a 2 year high, we note that most major markets (SP 500, US bonds,
Gold) are still very quiet as the market digests Bernanke’s QE pledge
and also gets prepared for the homestretch of the US presidential
election. We anticipate low volatility for the US stock and bond markets
going into the election. We notice that precious metals (gold, silver)
are staying strong, and consolidating near multi-month highs. We would
not at all be surprised to see these metals markets consolidate into the
presidential election as well.
However,
one market stands out today as the big mover – Crude Oil futures. DEC
12 Crude oil futures are the biggest loser in the commodities complex
today. We include a chart to share with you some key trendlines and
price levels. In a previous report we issued, we commented that we
thought crude oil would touch $100, which it recently did. Now, we note
that crude oil has broken a key multi-month supportive trendline and is
now approaching the next major chart support at $88. This is an
important price level in our view. If Crude oil can’t stay above the $94
area, we look for $88 to be hit.
To
us, it feels and looks like most markets are consolidating and are
waiting to see how some major issues develop before making their next
move – Europe, US economic data, and the US election. We believe the SP
500 remains in bull mode and that crude oil might hit its key downside
target of $88 shortly as traders prepare for a possible political
release of oil reserves by the US.
For
commodities investing and trading support (managed futures and options
account, commodities mobile trade alerts, and self-directed account
set-up, contact Lido Isle Advisors at 949-461-1137
PAST
PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. TRADING
COMMODITY FUTURES AND OPTIONS IS SPECULATIVE, INVOLVES RISK OF LOSS, AND
IS NOT SUITABLE FOR ALL INVESTORS.
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