IntroView

At the very least, profit-taking from yesterday's terrific gains are being seen across the markets; at worst, the reality of the weekend's events are setting in: that being that no concrete plans were agreed to salvage the Greece situation, and the markets await the verdict of the Baltic Tiger, Slovakia, to give the final imprimatur to the expanded ESFS plan. It was pointed out on Bloomberg Radio that residents of Slovakia earn less per capita than their Greek counterparts. So, the bailout vote has to be particularly tough and magnanimous at the same time. The market embrace of these hopeful moments continues to amaze, especially considering, on the simple math, the Greek situation will need to be revisited early in the New Year. There is increasing talk of bank haircuts for Greek debt exceeding 60%. At least, it's still not a default. As Slovakia goes, so goes the markets.
 

Petroleum Markets      
 
Crude oil is on the decline again today, as confidence wanes that a solution to the Europe's financial debacle will be sufficient to revive their faltering economies. Uncertainty has reappeared in markets, ahead of the Slovak vote and after the EU leaders delayed a crisis summit to October 23. The delay comes subsequent to German calls for larger bond write-downs than was originally agreed to in July. These factors are weighing down crude oil after a five day rally from the lowest levels recorded in several months at 74.95. However, despite these efforts from leaders to contain the crisis, they cannot hide the fact that Europe's debt problems are threatening the global economy, and accordingly, the future demand on crude. Volatility remains the markets consistent factor and that will continue. A rejection by the Slovak parliament may result in a selloff reminiscent of last week's action.
 

Petroleum Tech Talk    
 
The counter-trend rally from last week's low of 74.95 extended to 86.09 yesterday. $11.00 in less than a week, is quite a bit more of a retracement than we imagined. Still, as long as 90.52 resistance remains untouched, we expect the fall from 114.83 to continue to our target of 64.23. We will keep our bias neutral until there is a settlement over that mark. So far today, the market has been swinging on either side of today's pivot of 84.75, managing to only post a low 48 below there. Subsequent rallies have been unconvincing, as well.


Natural Gas   
    
Despite posting another new low for the current down leg, gas prices finished higher yesterday. The onset of more seasonal weather over the high consumption regions at the weekend, open interest saturated with short positions and sympathy with other financial markets was primarily behind the push higher. Still, the fundamentals are overwhelmingly bearish with a sluggish economy, comfortable inventories and high gas production likely to leave the market oversupplied and thus vulnerable to more selling. But the 11-month low, posted yesterday, must have attracted bargain hunters, anticipating an increase in heating demand which is drawing closer. So too, are technical targets which may have also triggered buying. The northern third of the country will start to see overnight temperatures plunge any time now.


Natural Gas Tech Talk      
      
How does the old maxim go, "Only a fool holds out for top dollar"? Well the same hold true in picking a bottom. After falling 4.5% last week and to the lowest level since October 21, 2010 we are now only a easy chip shot from our target of 3.416, which is why we moved our bias to neutral and we will hold that view waiting for a settlement below or a settlement violation of resistance at 3.853. A break of the lower tier will then target 3.255 key support. On the upside, break of 3.64 will suggest short term bottoming and would bring rebound back towards 3.853 resistance. Downside momentum is unconvincing, and the market reached deep into oversold territory last week when RSI reached into the low 20s.

source: KilduffReport.Com