Technically Speaking

Monthly Analysis: Energy Markets

Source: DTN ProphetX

Brent Crude Oil: The spot-month contract closed at $52.65, up $4.73 on the monthly chart. Despite the higher monthly close the major (long-term) trend remains down. The rally was a result of a minor (short-term) uptrend that had the spot-month contract testing resistance near $52.23. This rally looks to be Wave B (second wave) of a major 3-wave downtrend that still has a targeted low of $42.73, then $37.51.

Crude Oil: The spot-month contract closed at $50.17, up $4.13 on the monthly chart. Despite the higher monthly close the major (long-term) trend remains down. The recent rally resulted in a test of resistance at $50.20, a price that marks the 61.8% retracement level of the initial sell-off from $55.41 (January 2017) through the low of $46.04 (June 2017). The next wave down could result in a test of support between $40.65 and $37.20.

Distillates: The spot-month contract closed at $1.6519, up 17.64cts on the monthly chart. The major (long-term) trend remains down despite the higher monthly close. The July rally resulted in a test of resistance at $1.6678, a price that marks the 76.4% retracement level of Wave A (first wave) from the January 2017 high of $1.7647 through the June 2017 low of $1.3540. Wave C (third wave) could result in a test of support between $1.3067 and $1.1986.

Gasoline: The Chicago cash RBOB market closed at $1.7058, up 19.06cts on the monthly chart. The market remains in a major (long-term) sideways-to-up trend. Initial resistance is at the April 2017 high of $1.7710, then $1.8836. The latter marks the 38.2% retracement level of the previous downtrend from $3.4789 (April 2011) through the low of $0.8975 (February 2016).

Ethanol: The spot-month contract closed at $1.554, up 4.5cts on the monthly chart. The major (long-term) trend remains sideways. Resistance is at $1.712, a price that marks the 23.6% retracement level of the previous downtrend from $3.07 (July 2011) through the double-bottom low of $1.292 (January 2015 and January 2016). Support is at the double-bottom low.

Natural Gas: The spot-month contract closed at $2.794, down 24.1cts on the monthly chart. Natural gas remains in a 3-wave downtrend with the February 2017 low of $2.522 the bottom of Wave A (first wave). The May high of $3.431 was not only a test of resistance at $3.432, the 61.8% retracement of Wave A, but also the peak of Wave B. Wave C would now be expected to move below the Wave A low.

Propane (Conway cash price): Conway propane closed at $0.7000, up 14.50cts on its monthly chart. The July rally looks to be Wave B (second wave) of the ongoing major (long-term) 3-wave downtrend that began with the bearish reversal posted in February 2017. Cash propane tested resistance at $0.7200 in July, a price that marks the 50% retracement level of Wave A. Wave C has a target price of $0.4714.

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