Monday, April 4, 2011

Crude and Natural Gas

In case you missed it Fri. night the COT numbers once again showed builds in Managed Money long Open Interest; about 4% in WTI,  6% Rbob, 1% Heat.  Natty continued to show decreases in the Managed Money
short Open Interst; down about 12%....on top of the last couple weeks decreases the spec length is now about twice that of the shorts.
Meantime crude has hit a potential pivot area mentioned in the last post,WTI- Where next?,

 click to enlarge

Of course a minor pullback COULD be followed by new highs with the 120 target looming overhead, but if WTI were to take out the .618 retrace above it would no doubt be signaling an itermediate degree correction at a minimum.

The NG pullback looks corrective and is pretty much what was to be expected after the recent gains, it is likely a 2 wave and the big question is how deep it will be. 

 Could get a 50% retrace of the natty move up if it breaks below the horizontal support, taking it down to 4.15. On the upside,  
" There is an important declining trend line that cuts in the mid 4.60's. and the .78 retrace of that last leg down is at 4.63. Of course overlapping the Jan 24 high of 4.88 will get ALL the shorts crazy."
Keep in mind that seasonal highs typically come in between early April and late June.

On the road this week.

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