Technically Speaking

Weekly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed $2.48 lower at $54.62. The secondary (intermediate-term) trend remains down with the spot-month contract testing support at $54.55. This price marks the 61.8% retracement level of the previous uptrend from $45.19 through the high of $69.22. Weekly stochastics remain bearish meaning the contract could next test support at the 67% level of $53.33. The market is also in Wave 2 of a major (long-term) 5-Wave uptrend.

Crude Oil: The spot-month contract closed $2.75 lower at $48.14. The secondary (intermediate-term) trend is down with the spot-month contract below support at $48.87. This price marks the 67% retracement level of the previous uptrend from $42.03 through the high of $62.58. With weekly stochastics still bearish, and the market in the latter stages of Wave 2 of a major (long-term) 5-Wave uptrend, the spot-month contract could test the 76.4% retracement level of $46.88.

Distillates: The spot-month contract closed 3.39cts lower at $1.6302. The secondary (intermediate-term) trend remains sideways-to-down with the spot-month contract moving toward a test of its major (long-term) low of $1.5890. Like the oil markets, distillates look to be in Wave 2 of a major 5-Wave uptrend on its monthly chart. However, the spot-month contract will need to hold its major low from January.

Gasoline: The spot-month contract closed 10.04cts lower at $1.8282. The secondary (intermediate-term) trend remains down with the spot-month contract testing support at $1.8193. This price marks the 38.2% retracement level of the previous uptrend from $1.2265 through $2.1858, continues to hold. Weekly stochastics remain bearish indicating a test of the 50% retracement level at $1.7062 is likely. The major (long-term) trend remains up.

Ethanol: The spot-month contract closed 5.70cts lower at $1.4950. The secondary (intermediate-term) trend is sideways. Next support is pegged at $1.4309, a price that marks the 67% retracement level of the previous rally from $1.2920 through the high of $1.7090. Weekly stochastics are neutral-to-bearish. The major (long-term) trend remains up.

Natural Gas: The spot-month contract closed 9.4cts lower at $2.776. The secondary (intermediate-term) trend remains sideways. However, the spot-month contract posted a bearish outside week indicating the market could now fall back to the low end of its trading range between $3.115 and $2.556. The major (long-term) trend is sideways-to-up.

Propane (Conway cash price): Conway propane closed 0.25ct lower at $0.3300. The secondary (intermediate-term) trend remains sideways-to-up with initial resistance at the 4-week high of $0.3525. Initial support is at the 4-week low of $0.3025. Weekly stochastics are neutral-to-bullish. The major (long-term) trend is sideways-to-up.

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Comments

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DARIN NEWSOM
8/2/2015 | 10:28 AM CDT
You're welcome Abbey. And note that I also post monthly analysis of the energy sector that looks at the major (long-term) trends. Thanks again for your comments.
ABIODUN AWOLAJA
8/2/2015 | 4:03 AM CDT
Thanks for the clarity Darin. I really appreciate the level of undemanding you bring into these analysis Regards Abbey
DARIN NEWSOM
7/29/2015 | 7:56 PM CDT
Hi Abiodun and thank you for your comments. I have a very simplistic view of trend timeframes: Major (long-term) is what I see on monthly charts, Secondary (intermediate-term) trends are on weekly charts, and minor (short-term) trends are the patterns I see on daily charts. These trends can all be different for a particular commodity (e.g. Crude oil: minor down, secondary down, major up). I look for the same turn signals (e.g. reversals, crossovers by stochastics, etc.) for all three, with more importance put on the longer term signals (monthly vs. weekly, weekly vs. daily). Thanks again for your questions and comments.
ABIODUN AWOLAJA
7/29/2015 | 9:11 AM CDT
Hi Darin, thanks for putting in your technical analysis in for the energy market. I have a question for you. Your definition of your intermediate term trends and consequently short term and long term trends is not quite clear. I am used to performing swing charts on commodities to determine these three scenarios. The intermediate term trend i eventually trade after determining where we are at the moment (for the particular commodity I am analysing) Is your analysis based on swing charts? Or do you determine these three trends using different technical analysis? Thanks Abiodun