ALERT: EURO-DEBT CRISIS STILL DOMINATING HEADLINES AFTER S&P ROCKS BOAT.
 
PETROLEUM MARKET

The market was showing a bit of relief after policymakers  from the Eurozone signed off on the latest tranche  for Greece. But a monkey wrench was thrown into the works after Standard & Poor's declared that the proposed debt rollover plan for Greece may still put the country in "effective default." Additionally, concerns of slowing in China rose after issuance of data that showed its services sector expansion fell slightly in June. The pall of summer doldrums may envelop the market this week as participants await the key non-farm payrolls report, due on Friday, for the latest directional cue on the US recovery. But with the Greek issue continuing to fester, sentiment may be shaken by the next headline and gains may be limited. Also, robust bidding for the coming US SPR release suggests that a considerable amount of light, sweet crude will be added to hit the market over the next month, which may reduce the need to import crude and keep a lid on world oil prices in the short term.


TECH TALK

The most immediately interesting thing on the chart is the very obvious inverse head and shoulders formation. The left should formed mid-June between 92.00 and 96.00, the head the forming just below 90.00 and the right shoulder, price action of the last week or so between 94.00 and 96.00. The measurement of the head to the neckline suggests that an eventual breakout could potentially carry to 102.00. But with prices running just above the neckline and the 13-day exponential moving average without breaking out should prove disconcerting for market bulls waiting for this. In fact, the weekly chart shows that prices are still controlled by the bears off the sell off that began in early May. Any eventual breakouts may have pullbacks, which, if the do not fall below the neckline of the formation may provide even better buying opportunities.
 
 
NATURAL GAS

Gas prices slipped a bit on Friday on uncertainty over weather forecasts for this week. While the thermometer should press higher, particularly in the South, bolstering cooling demand, the market is also weighted by the usual imbalances that can only be offset by a sustained heat wave or a disruptive hurricane in the Gulf. Tropical Storm Arlene, the season's first named storm, petered out last week, not amounting to much. However, it did serve as a reminder that the that the Atlantic hurricane season had commenced, and  that subsequent storm warnings should evoke similar reactions. But current levels production should translate into a reserve cushion more than adequate to meet most disruptions. The shortened week and the jobs report on Friday should keep price movements somewhat subdued this week.
 
 
TECH TALK  

The chart still presents as bearish with prices well under the 13-day exponential moving average, which we will be using as our benchmark from now on.  Price action has been isolated to a range, described basically as 4.00-5.00. Interestingly though, successive waves since Spring have achieved higher highs while remaining above 4.20. With  the moving average line declining, we can deduce that the bears are still in control. However, with prices above today's pivot point of 4.303 there is some inherent strength to the market, suggesting that another short-covering rally may be building.
 

source: KilduffReport.Com