IntroView
 
The US employment data and the on-going euro zone saga have the markets on the run again. Thankfully, US markets were closed, yesterday, so the european rout was put off for a day. The anxiety is building, and climax on Thursday as both Fed Chairman Bernanke and President Obama make remarks about the economy, and the marketshope to hear plans for growth. It is hard to imagine what the President can hope to achieve. The opposition in the House of Representatives to new spending is fierce. One local Congresswoman in New York agreed that additonal funds for FEMA should only come with offsetting budget cuts. This is as Hurrican Irene ravaged her District! Now, that is commitment to a cause. The other usual suspects -- Greece, Italy, Spain - are also effecting the outlook. Volatility will remain high, and the hopes for economic improvement, in the short-term, low.
 

Petroleum Markets

With the US on holiday Monday, the market focus was on Europe where renewed concerns over sovereign crisis in the periphery added to the damped sentiment stemming from the dismal American jobs report on Friday. The growing threat forced the Swiss National Bank, on Tuesday, to set a minimum exchange rate for the euro at 1.20 Swiss francs per. Do not give too much credence to the Commitments report which showed speculative interests increased their net length. The measurement was through last Tuesday, when prices were close to the high for the week. The dismal jobs report, on Friday, doubtless must of caused a change of heart, for many. Investors apparently have little hope that the global political leadership is incapable of producing any substantial response to the gathering storm.. In oil's case, the conclusion is one we saw as inevitable for some time. This can not be good for energy demand growth. The calculation now is what is the value of a barrel of oil under these circumstances. Clearly, $100 or $90 or even $80 is too high. The price, without fluff, is probably closer to $60, and we would not be surprised to see something close to that by Thanksgiving. Unless, of course, the post-Lehman phenomenon of holding hard assets grips traders' psyches, once again.
 

Petroleum Tech Talk
 
While prices tested 89.00 resistance several times last week, the market could not muster enough momentum to best 90.00 nor, also, again, manage to settle above 89.00. holding secondary support today at 83.38. Near term focus remains on 82.95 minor support. Break there will indicate that consolidation from 75.71 is finished, especially after failure to hold 89.90 and strongly suggests another try at 75.71. Once that is breached it will confirm a resumption of the whole fall from 114.83 and should target the 70.00 psychological level next. Sustained trading above 90.00 though will raise the probability that the market has bottomed.
 

Natural Gas
 
The short, sharp, short-covering rally has ended and the focus shifts back to weather and supply. Prices were lower in subdued trade on Monday, as milder weather forecasts and easing concerns over a disruption to supplies in the Gulf weighed. For the trading day, where trades were to be booked with Tuesday's transactions for settlement purposes, because of the Labor Day holiday on Monday, prices posted a low, so far, of 3.851, where they have stabilized, for the moment. But the imbalances which have plagued the market for some time, mild forecasts, record production and a weak economy weigh should keep buyers restrained unless a storm disrupts significant Gulf Coast supplies. Hurricane Katia in the western Atlantic Ocean is not expected to threaten Gulf of Mexico gas production, so look for prices to head towards recent lows, once again.
 

Natural Gas Tech Talk  
 
The market rejected key resistance in the 4.14 area and quickly ducked under 4.00 again, strongly hinting at its inherent weakness. For thee Monday/Tuesday session, there have been no trades, so far above 4.00. But the break of 4.048 minor resistance on the way up indicates that a short term bottom may have formed at 3.78. This idea is bolstered by the fact that the 100% projection off the measurement of the 4.983 to 4.154 move when taken from the recent high of 4.612 is 3.783. We will still keep our bias to the downside, but if 3.78 holds for the week, we will shift back to neutral, because it will suggest that a bottom is forming. Below 3.78, support will extend such decline through 3.731 support towards 3.255 low next. On the upside, however, break of 4.13 resistance will in turn argue the that fall from 4.983 is over and stronger rebound should then be seen to 4.612 and above.. A move that seems to have little likelihood right now.
 

source: KilduffReport.Com