Showing posts from September, 2014

WTI Crude...NOT a Sale

The party is over or nearly over for the shorts. This is NOT where you want to be short.... Spec Net Open Interest has fallen from the highs of the year to the lows of the year in just 3 months and now stands at roughly half of what it was. Reuters ; click to enlarge Prices have eroded below the hoary, "head and shoulders neckline", but do not look in danger of accelerating. In fact, in my experience it is very rare for WTI to have follow through, after taking out obvious necklines; more often it reverses rather quickly ( I have no data on this).   Weekly click to enlarge More important is the .618 relationship between the A and the C legs of  what can be seen as a sideways consolidation. Coupled with the oversold condition of the market it will be expected to provide medium to longer term support. Daily click to enlarge Note the repeated RSI positive divergence. While a cursory Elliott wave count would accommodate one or more furthe

Natural Gas Headed for Lows

Yes, new lows are likely and will offer a superb buying opportunity for all the reasons mentioned here .  Daily The long term .618 retrace of the entire multi year rally, from $1.90 to $6.52, is at $3.64. That level was close to being tested and held $3.73 on Aug 18. Unfortunately the subsequent $.35 rally has failed to follow through and the entire structure now has a distinctive "abc" look usually associated with corrective moves.  So fresh lows ARE likely, but considering the seasonal factors and Elliott support not by very much.. $3.65 to $3.55 MAYBE. Today after a weak open the EIA storage numbers were released;   Injections were slightly above industry expectations, but still lots of catching up to do.