ALERT: WHAT A DIFFERENCE A DAY MAKES, OR DOES IT?
 
PETROLEUM MARKET

Commodities regained their footing in overnight trade as the dollar eased a bit Goldman is driving the commodity lemmings again with buy recommendations, as well. Crude is up over a dollar in the early going, reversing the losses that started the week. Make no mistake though, the sentiment that drove prices down yesterday, may have been salved somewhat by falling strategic commodity prices, but it is still bubbling under the surface. It has been over two years since the recession officially ended but house prices are still falling, unemployment is still rampant and those with jobs live in fear of losing them. This is hardly an atmosphere that fosters a confidence that leads to demand growth. Still, fighting in Libya, a broken deal in Yemen, a Si no-juggernaut that appears beyond taming will all work to push upward momentum. New budget cuts in Greece represent just another ineffective band-aid that is going down the road to inevitable default. They will be the first of several. There is still an unofficial cap at $100, and the overall trend should still point to consolidation in the $94-$96 area before another significant leg higher.
 
 
TECH TALK

Crude oil's Intraday bias is to the upside with almost half of yesterday's losses regained. The market should still be capped at $100 for psychological reasons more than anything else. We still hold to a consolidation zone forming in the 94-96 area, a break of which will target 90. An upside breach of the recent highs near 104.63 will target the most recent high of 114.83, but that seems unlikely, for the moment. While the market should hold above 90, a break, on settlement would target 84.10 and 64.23 beyond that. While this also seem unlikely downward momentum seem easier to achieve than upward right now.


NATURAL GAS

Bargain hunters took advantage of the opportunity offered by disgruntled buyers at higher levels after their liquidation. The approach of warmer weather, with its promise of the appearance of significant cooling load, was the clincher. Also lending support was Baker Hughes data on Friday showing the gas-directed rig count fell for a second straight week to a 16-month low, raising hopes that production will start to slow. But with stockpiles at over 1.9 Tcf, a momentary rise in the mercury will hardly stoke upward momentum to new highs, particularly with nuclear plants coming back on line. If EIA's estimates are correct, storage injections this stock-building season could reach 2.29 Tcf, the largest April-through-October build since 2003, which would drive domestic inventories to an all-time high by next winter. Stay with length over 4.20 with a target of 4.879
 

TECH TALK

The move back over the moving averages reignites a buy signal. Prices running well ahead of the pivot of 4.315 also show the market's inherent strength. Settlement above last week's high opens the way to a challenge of the early May  high. Gas rebounded strongly after dipping to 4.077, a reversal back below will move the bias back to bearish and also target 3.731.First resistance now is 4.729 with an eventual target of 4.879. A breach thee would then target 6.108. As this is the stock building season it is going to be hard to see an extension unless injections are particularly disappointing or there is a meteorological intervention.

source: KilduffReport.Com