ALERT: IEA JOINS IMF IN WARNING OF DETRIMENT TO GLOBAL ECONOMY CONTAINED IN HIGH OIL PRICES ACCELERATING SELL-OFF
 

PETROLEUM MARKET

We had been warning since the middle of last week about the possibility of a "trap door" in the market, and it swung wide yesterday. There were probably meetings all around the world on what to do about long oil positions held by speculative interests and price action implies a good many were swept away. Of course, there was still a good deal of profit in many of them so these same interest have restocked their cash. But many were new, weak, impatient longs that joined the party near 108.00 as indicated by last week's price action. There could be a period of consolidation, perhaps lasting until the end of the week, as the market catches its breath. Participants in all markets have in their minds the warnings about high prices for basic commodities possibly wrecking the recovery, such as it is. Perception then points lower and for a while it may be the path of least resistance.


TECH TALK

Another $4.00 of profits fell through the trap door yesterday. There is a short term top in place off  Monday's highs, and the retreat is still underway with the new low for the move last night. However, since that price was only marginally lower than yesterday's close we will not give it all that much weight. The market has now dropped below the 10-day moving average so that extinguishes the active buy signal that had been on since the beginning of the month, showing inherent weakness at the front of the market, as well.

 
NATURAL GAS

The market is on a pause before attempting another run at 4.00. However, sclerosis may lead to an oversold condition building again with fundamentals so easy to read. Participants think they are entitled to a gift at this time of year with little of either heating or cooling demand and stockpiles at the levels they are. Look for EIA to report that another 26 bcf was injected when they report tomorrow. The rest of the complex may be in for a period of consolidation which may hold up gas until the end of the week, as well.  
 
 
TECH TALK

The 10-day moving average has moved under the 60 day which shows the market's overall weakness on the front end., but there is a sign of some strengthening with prices moving above today's pivot point of 4.10. Once prices move below, 4.00 will again be a target. However if prices do not move below 4.00 before the May contract goes off the board, a major bottom may have been installed. This would require that the previous low of 3.731 holds.

source: KilduffReport.Com