ALERT: MARKET LOCKED IN A TRADING RANGE.
 
PETROLEUM MARKET
 
Gold broke 1600 for the first time on record as the travails in the US and Eurozone seem no closer to resolution. Risk appetite was undoubtedly weak with Swiss franc, another safe-haven, rising to a record high against the euro and the US dollar. Oil prices fell as low as 95.05 before closing at 96.25, down -1.38%. The contract has been covering the same ground for weeks. The next cue will come from stockpile reports tonight and tomorrow, which are forecast to show a drop in crude, consequently prices are making up ground lost yesterday. Both US and European policymakers seem at a loss and quite incapable of getting past politics and containing the crisis they both face. As we have said repeatedly, what is there that can come out of this that is positive for energy demand growth? Not very much, as far as we can see.
 

TECH TALK

Crude oil is in a sideways trading pattern, having covered the same ground over and over for weeks. The bias is neutral until there is a break of one side or the other. The decline from the early May highs does seem to dominate technically, but a break below 94.74 will be required for confirmation. If confirmed, the next support level will be congestion at 83.65-83.85. A break to the upside will be suggested by a breach of 102.44 and target 114.83.
 

NATURAL GAS

Despite posting a new high for the current move and blazing heat, gas prices finished little changed  yesterday, perhaps signaling growing resistance. Cooling requirements will certainly rise with the mercury in coming days with readings forecast to top 100 degrees in New York City. Even though temperatures will probably be extreme over most of the eastern third of the country through the end of the month, the 2.611 Tcf  EIA recorded stored as of last week's measure, should be more than ample to meet demand. Certainly a conclusion may be drawn that the gap to the five year average of 2.663 Tcf. will widen, buoying prices in the short term. Additionally, the current heat wave, no doubt, will produce smaller than normal storage injections for several weeks running, which could consequently bias directional cues to the upside. That supportive rug though could be yanked from beneath participants' feet rather quickly so extreme caution in acquiring length at these levels should be exercised.

 
TECH TALK

The reversal off the recent low at 4.064 has traced out a sharp upsurge on the chart, one that is unsustainable at its current slope. Prices have also run well ahead of the 13-day EMA showing that the bulls are fully in control, for the moment, so the directional bias is to the upside. The 61.8% retracement from the recent high at 4.983 targets 4.632 which is well within reach.. Each successively higher price though at this point should be met with stronger and stronger resistance, given the current fundamentals. A break below minor support will suggest the move off 4.064 has probably concluded.
 

source: KilduffReport.Com