ALERT: COMMODITIES BOUNCE BACK.
 
PETROLEUM MARKET

Oil rebounded Monday, after last week's dramatic sell-off. In fact all Friday's losses were made up and a good portions of Thursday's as well. Price action in the last hour of trading looked like participants were racing to catch a train that had already left the station and then after 113.40 was posted, regretted they did. The market is an impossible read right now, either from a momentum perspective, an attempt to weigh fundamentals or from a technical viewpoint. The market has been moving with the dollar so it measure as macroeconomic valuation seem to be the dominant one, for the moment. Of course, this will also rekindle the argument that rising oil prices threaten the fragile recovery if prices break above 110.00. In the end though it will only be rising prices that will disrupt a demand led rally. Prices at 114.00 and higher last week were supported by air and had to inevitably fall. The only question now is, have they fallen enough.
 
 
TECH TALK

The chart still has a somewhat neutral bias in that there was an abrupt halt to follow through selling from last week, but this week's buying has yet to break out convincingly to the upside. The market is still below the moving averages which means there is still an active sell signal. Today's price action has not permitted much activity below the pivot of 101.12, which shows the market has inherent strength. A congestive pattern here though would relate to previous similar pattern from late March and mid-April, just before the market took off on its final leg higher for that move. A break down here would negate those patterns, and open the way to a stronger zone of congestion in the 92.00-96.00, which is more likely.
 
 
NATURAL GAS

The market remains pressured by the view that spring's expected seasonal decline in gas use, a consequence of usually mild weather around the country this time of year, will produce stock levels more than ample to meet summer cooling loads. Production outages from storm damage from June through November will not be cause for too much worry this season either. This has plagued the market for over three years. It looked for a moment that 4.00 might be a major bottom, and still may, but the market can not seem to hold positive momentum much past 4.50 either. The unusually large number of nuclear plants shut this spring for maintenance has triggered more demand for gas and helped support prices since mid-April. But real demand, seasonal cooling load and expanding industrial demand will be required to boost prices to new highs. Stay with length but breach of Monday's low, should prompt more long liquidation.  
 
 
TECH TALK

There is still an active sell signal with prices below the moving averages. We are right at today's pivot of 4.20 and price action has taken place on either side of it. The next important test is coming at 4.05, the early April low. It it holds the market should at least test 4.50 again before failing. A convincing break of 4.05 will bring 4.00 into play very quickly and a test of the band of support at 3.60-3.80. A move higher, particularly one supported by fundamentals should test the January highs.
 

source: KilduffReport.Com