ALERT: "ONLY" 414K NEW JOBLESS CLAIMS. IS THAT WHAT PASSES FOR GOOD NEWS THESE DAYS?

PETROLEUM MARKET

Whatever are people thinking. Yesterday's market action was perfectly in line with the current environment. The sad truth is that the global economy is not substantially better off than the weekend Lehman Bros. Came apart. The problems of the PIIGS nations are not going away and that should speak volumes about energy demand growth and it has; finally. There was a momentary break to the upside in crude when it was announced that "only" another 414k people opened unemployment claims last week....really? That is a positive? It is just whistling past the graveyard. The market is going right back to where it was before the MENA crisis began to bubble up the $83-$85 area. There may be some short-covering from time to time but rallies should be seen as selling opportunities, with $100 as the ceiling for now. Over the next few weeks that number is sure to be lowered.
 
 
TECH TALK

Crude oil dropped to as low as 94.03 so far and the break of 94.62 support breaking down below consolidation and down and out of the bear pennant. There is clearly a downward channel now but it is very wide and volatility could persist. The first support should come in at 89.96, which opens the way to 85.85. On the upside, above 99.95 minor resistance is needed to signal short term bottoming. Until then we will stay with our bearish prediction.
 
 
NATURAL GAS

Milder weather, sluggish economic data, and a sharp slide in crude oil weighed on gas yesterday and a late session rally could not push the market into positive territory. In fact,the nearby contract, which hit a 10-month high of $4.983 last Thursday, has lost 3.8%. Additionally, mild weather this week, negative economic sentiment and nuclear units returning to service after maintenance may also be undercutting the market. There may be some short-covering ahead of the EIA report, but we expect larger than expected injections of 86 bcf so that may push prices below the 4.50 area.
 

TECH TALK

The market is consolidating below the recently struck near term top of  4.983. Breaking back below 4.50, the point of launch for the last leg higher, shifts the bias back to negative. The market is below the 10-day moving average and heading towards the 40 and 60 day, which are close together reflecting the relatively narrow range of recent price action. This is the critical juncture, and why the market seems to be finding a consolidative level here. A break below 4.50, on settlement, should bring 4.00 into play rather quickly. An upside break above the recent high though may bring the elusive 5.00 level into play.

source: KilduffReport.Com