ALERT: MARKET READY FOR GOOD NEWS; ADP PROVIDES IT. WILL LABOR DEPARTMENT ENDORSE OR OVERRULE?
 
 
PETROLEUM MARKET - The already rallying crude oil market got a further boost from ADP, who said private sector employment increased 157k after a modest 36k gain in May, more than double economists' expectations. Although sometimes wildly divergent, this data is also viewed as a preview to the Labor Department's non-farm payrolls report. This harbinger of renewed energy demand growth carried prices to 99.42 before retreating to 98.67 by settlement. The market has surrendered more of those gains in the overnight session as profits were gathered before today's data. Estimates vary widely from a low of 40k to a high of 175k, with most around 105k. Pundits seem to have reached a consensus that anything over 100k will be viewed positively. Upward momentum was also aided by the drawdown of crude oil stocks reported by both API and EIA, although the later was below expectations. Additionally, leading U.S. retailers reported better-than-expected sales for June, further boosting hopes for oil demand.   
 
 
TECH TALK- Responding to positive economic data this week's rally pushed to a new high as well as a higher low for the move on good volume. Prices are well ahead of the 13-day EMA, now at 96.05, close to the breakout point on Tuesday from the neckline of the inverse head and shoulders formation. Even though prices have retreated somewhat overnight, the bulls remain firmly in charge so the bias remains to the upside. A pullback to this point, especially if accompanied by lower volume could present an excellent buying opportunity, but a disappointing jobs number could breach it and if it occurs through settlement may signal the end of the rally and a continuation of the fall from 114.00, begun in early May.
 

NATURAL GAS - An already declining gas market increased its fall after a surprisingly large injection to storage was reported by EIA yesterday. Last week's supportive storage build had caused a consolidative pause to the decline from near $5.00, posted last month, but significantly extant imbalances combined with the decidedly bearish data this week could not be overlooked, putting the bears firmly back in control for the moment. Now the fundamentals and technicals point in the same direction so a real possibility now exists of posting new lows below $4.00, now easily within striking distance. Add to it, returning nuclear generation and it will take a considerable spell of hot weather or a serious tropical storm to overcome the downward momentum. That being the case however, there is the recurring problem of sclerotic shorts  creating grossly oversold conditions which cause violent short covering rallies. Additionally, gas, like all markets, may be roiled by the monthly jobs number, due later this morning.
 

TECH TALK -  The chart presents an even more bearish look than recent days. Prices are well under the 13-day EMA. Most price action, so far today,  has also been contained below resistance at 4.148. Intraday bias has decidedly flipped to bearish, with 4.00 clearly targeted. As long as 4.40 resistance remains intact, the outlook will remain bearish. On the upside, though, above 4.40 will bring stronger rebound to retest the recent high of 4.983 instead. A word of caution: the longer it takes for the market to breach 4.00, watch volume closely. Falling volume and the lack of lower lows will be a harbinger of a building oversold condition.
 

source: KilduffReport.Com