Technically Speaking

Weekly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed $3.57 lower at $45.46. The secondary (intermediate-term) trend remains down with the spot-month moving below major (long-term) support at the January 2015 low of $45.19. Weekly stochastics are deep in single-digits reflecting a sharply oversold situation. However, pressure continues to come from selling tied to both noncommercial (investment) and commercial traders, the latter indicated by the strengthening contango in the nearby futures spread. Monthly stochastics are also below the oversold level of 20% with the next major low at $36.20 from December 2008.

Crude Oil: The spot-month contract closed $2.05 lower at $40.45. The spot-month contract moved to a new low of $41.35, extending the secondary (intermediate-term) downtrend. Both weekly and monthly stochastics are below the oversold level of 20%, but have done little to spark buying interest from either commercial or noncommercial traders. Friday's CFTC Commitments of Traders report showed the latter reducing their net-long holdings by 15,279 contracts. Next major support is at the December 2008 low of $32.40.

Distillates: The spot-month contract closed 9.55cts lower at $1.4624. The spot-month contract moved to a new low of $1.4507, extending both the secondary (intermediate-term) and major (long-term) downtrends. Next major support is at the March 2009 low of $1.1311. Monthly and weekly stochastics remain well below the oversold level of 20%, though this has not led to increased buying interest from either commercial or noncommercial traders. Friday's weekly CFTC Commitments of Traders report showed noncommercial interests holding a net-long futures position of only 1,932 contracts, down 2,592 contracts from the previous week.

Gasoline: The spot-month contract closed 14.20cts lower at $1.5459. The secondary (intermediate-term) trend remains down. However, the ability of the spot-month contract to hold support at $1.4529, a price that marks the 76.4% retracement level of the previous uptrend from $1.2265 through the high of $2.1858, keeps the major (long-term) uptrend in place. The major (long-term) trend remains up with the secondary downtrend a possible Wave 2 of a 5-wave uptrend cycle. Friday's CFTC Commitments of Traders report showed noncommercial interest increasing their net-long futures position by 2,074 contracts.

Ethanol: The spot-month contract closed 2.30cts lower at $1.4470. While the market remains in a secondary (intermediate-term) sideways-to-down trend, weekly stochastics have moved below the oversold level of 20%. This could set up a potential bullish crossover if the spot-month contract is able to move back toward the high-end of its sideways range at $1.5200. An uptrend in the nearby futures spread continues to reflect support coming from commercial buying.

Natural Gas: The spot-month contract closed 12.5cts lower at $2.676. The secondary (intermediate-term) trend remains sideways. However, the spot-month contract moved below support at $2.704, a price that marks the 67% retracement level of the rally from $2.443 through the high of $3.105. With weekly stochastics neutral-to-bearish the market could see continued selling. Next support is at $2.566, then the major (long-term) low of $2.443.

Propane (Conway cash price): Conway propane closed 1.25cts lower at $0.3375. Despite the lower weekly close the secondary (intermediate-term) trend remains up. Weekly stochastics are bullish indicating the market could regain upside momentum in the coming weeks.

The weekly Commitments of Traders report showed positions held as of Tuesday, August 18.

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