Technically Speaking

Monthly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed at $42.46, down $7.22 on the monthly chart. Despite another lower monthly close the market remains in a major (long-term) 5-Wave uptrend. The secondary (intermediate-term) downtrend is a Wave 2 pullback with next support at $39.98. This price marks the 50% retracement level of Wave 1 from the low of $27.10 (January 2016) through $52.86 (June 2016). Weekly stochastics remain above the oversold level of 20% indicating the market has more room to the downside.

Crude Oil: The spot-month contract closed at $41.60, down $6.73 on the monthly chart. Despite another lower monthly close the market remains in a major (long-term) 5-Wave uptrend. The secondary (intermediate-term) downtrend is a Wave 2 pullback with next support at $38.86. This price marks the 50% retracement level of Wave 1 from the low of $26.05 (February 2016) through $51.67 (June 2016). Weekly stochastics remain above the oversold level of 20% indicating the market has more room to the downside. The 67% retracement level is down at $35.84.

Distillates: The spot-month contract closed at $1.2760, down 20.87cts on the monthly chart. Despite another lower monthly close the market remains in a major (long-term) 5-Wave uptrend. The secondary (intermediate-term) downtrend is a Wave 2 pullback with next support at $1.2186. This price marks the 50% retracement level of Wave 1 from the low of $0.8487 (January 2016) through $1.5848 (June 2016). Weekly stochastics are nearing the oversold level of 20% indicating the Wave 2 sell-off could soon end.

Gasoline: The spot-month contract closed at $1.3210, down 18.04cts on the monthly chart. Similar to the oil markets, RBOB gasoline remains in a major (long-term) 5-Wave uptrend. The secondary (intermediate-term) downtrend is a Wave 2 pullback with support at $1.2020. This price marks the 50% retracement level of Wave 1 from the low of $0.8975 (February 2016) through $1.6664 (May 2016). Weekly stochastics are below the oversold level of 20% meaning Wave 2 could soon come to an end.

Ethanol: The spot-month contract closed at $1.427, down 19.7cts on the monthly chart. While the major (long-term) trend remains up the secondary (intermediate-term) trend is down. However, weekly stochastics are below the oversold level of 20% while the spot-month contract tests support at $1.401. This price marks the 76.4% retracement level of the previous secondary uptrend from $1.296 through the high of $1.739.

Natural Gas: The spot-month contract closed at $2.876, down 4.8cts on the monthly chart. The major (long-term) trend remains up. The spot-month contract continues to test resistance at $2.979 (the July high was $2.998), a price that marks the 33% retracement level of the previous downtrend from $5.72 (January 2014) through the low of $1.611 (March 2016). The 50% retracement level is up at $3.665. However, weekly stochastics are already above the overbought 80% level meaning the market could move into a secondary (intermediate-term) downtrend.

Propane (Conway cash price): Conway propane closed at $0.3550, down 11.50cts on its monthly chart. The major (long-term) trend looks to have turned sideways with resistance at $0.5428 and support at 0.2525. Weekly stochastics are below the oversold level of 20% indicating the secondary (intermediate-term) downtrend may be coming to an end as the cash market tests support at $0.3491.

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