Friday, March 28, 2014

WTI...Cushing Inventries Decline


Mind you it's just moving to Padd 3 etc. but it is still the futures delivery point.


Monday, March 24, 2014

Brent Breakout

Long overdue, the 2 year long consolidation by Brent may have completed Thursday morning. If so upside potential is very significant. The triangle formation allows a fairly easy and early buy signal on an upside breakout;
Weekly
click to enlarge
Note the classic false break to the downside followed by the reversal..(can be seen more easily on the daily chart below).
Weekly
click to enlarge
As you can see the 50% reversal of the entire plunge down from 128.40 to 88.49 is the immediate resistance around 108.44, and once above that hurdle Brent will likely test the .618 retrace area around 113.15, about where the downward sloping trendline hits on the weekly chart.

Daily

click on charts to enlarge
Note that 108.44 is also a 200 d MA point.

The really interesting question is: what are the upside targets when Brent breaks to the upside?
If it were to exceed the 113 area  the high from 2012, 128.40, would certainly come into the sights,
and a double top at 140 cannot be ruled out. In Elliott terms a B wave or 2 wave can retrace nearly all of the preceding wave, 140 to 30, from 2008/9

Additional upside help for Brent is also provided by the Crude and Gasoline Winter to Spring seasonal rally pattern. The Spring Rally history over 30 years avg.s into mid May.

The Brent Wti spread is also looking supportive. More on that later.