ALERT: MENA CRISIS ESCALATES, QADAFFI VOWS RESISTANCE.
 
PETROLEUM MARKETS

After initially falling, Oil prices moved up steadily in yesterday's session and extended those gains in overnight trading as violence in Libya continued and tensions in other parts of the Arab world escalated. Loyalist forces in Libya continued shelling rebel positions. In Yemen, President Ali Abdullah Saleh warned of a 'bloody civil war' if the army was divided or if defecting generals attempted to seize power at this moment. Additionally, bonds of Europe's most indebted nations fell showing that the sovereign debt debacle is far from over and an EU bailout may still be necessary. But with potential demand constrictions from austerity in Europe and natural disasters in Japan, supply disruption still trump participants' concerns. Still, as prices rise demand elasticity will be questioned and that equation may need recalculation.
 
 
TECH TALK

We noticed this morning that a "M" top (circle) may be forming. If prices break down from here it will look particularly bearish, in the short term, at least. If there is a gap down that puts the top formation in an "island" that will add to inherent bearishness. A retreat from this sort of top will be a more gradual decline than a "A" top or "V" bottom, which usually require an accompanying event. For the moment though, prices above the moving averages still give the market a bullish cant.
 
 
NATURAL GAS

It looks like gas has finally broken out behind the driver of an anticipated move by Japan away from nuclear energy.  Natural gas futures have risen 11% since the earthquake and tsunami started the desperate attempts to battle a possible meltdown that is ongoing. The prospect of stricter regulation of the nuclear sector here, in the wake of the Japanese debacle has gas executives salivating at the possibility for their fuel which was not expected to work out of its structural imbalances for years. In fact, low prices have caused some producers to halve their drilling activity. Now, gas may receive a welcome gift for several years if nuclear energy again becomes the victim of the public's fears.
 
 
TECH TALK

The beautifully rounded bottom is clear, slowly lifting the market away from support and by the time it gets to resistance at 4.25 easily pushing through. Last night's settlement up and through the 200-day moving average must have surely run off all but the most recalcitrant bears. With all price action today above the pivot at  4.225 the market looks to have plenty of follow on momentum to carry through resistance at 4.298.

source: KilduffReport.Com