ALERT: BIN LADEN DEAD, BUT EFFECT ON MARKETS NOT LASTING
 
PETROLEUM MARKET

Clearly the fall in crude oil prices and the $3.32 range the market has posted already is a reaction to the death of Osama Bin Laden's demise at the hands of the US military. The logic is that the risk of supply disruption is somehow lowered and this thinking is effecting all the markets with the dollar sharply rising and equities rallying. But the real consequences will be played out in the days ahead. In fact, the reversal off today's low at 110.82 probably reflects that threats to supply still exist from any of several sources. Although Bin Laden's influence seems to have been on the wane in recent years, the moral certitude of religious fanaticism often evokes irrational behavior. Last Friday we found ourself asking rhetorically, What had changed materially to cause prices to rally from their lows? A similar question can be asked today, What material change has occurred to cause prices to plummet? No one truly knows how this will play out. Do not be surprised if either today's highs or lows are revisited. The war on terrorism is far from over, and threats to supply will always be there.
 
 
TECH TALK

The l110.71 low from last week was almost revisited today as the market posted a 11.82 low. There have now been several attempts to break out to the upside going back to earlier in April. Today's low has pierced the 10-day moving average but a settlement below would be needed to extinguish the active buy signal. The market continues to run ahead of the averages which is still bullish. Selling today has already pushed through several levels of support which now become resistance. 112.73 is the next level followed by 113.45.  
 

NATURAL GAS

Speculative interests have recorded their highest level of length in several months, influenced apparently, by the smaller than expected injections into storage consequent to unusually high nuclear outages. Nuclear facilities are undergoing particularly rigorous inspections and maintenance after Japan's problems as well as shutdowns after the worst day of tornadoes in 37 years, spurring demand.  Additionally, EIA reported less of a build to stocks than was expected last week. The small build put the inventory deficit to last year at 215 bcf, and eliminated the 23 bcf surplus to the five-year average. In fact, it was the first time storage has declined below the average in two months. Still structural imbalances remain and further gains will be increasingly difficult until summer heat ramps up cooling demand. Only open new length if the high from late March is bested on settlement.   
 

TECH TALK

The chart strengthened its bullish look with today' price action already posting a new high for the current move. The market has now moved above the the most recent highs from late March. The market now targets the late February high near 4.85. All indications point to further rises with moving averages running well ahead of the market and arrayed to depict a rising market. There is also an active buy signal. Most price action so far has been ahead of today's pivot at 4.653. First support comes in at 4.60 with resistance at 4.75. Add to length until target of 4.85 is reached or prices dip below the 10-day moving average.
 

source: KilduffReport.Com