Daily Moving Averages: 21, 55, & 100: 109.84, 110.49, 111.04
Weekly Moving Averages: 21, 55, & 100: 110.82, 111.44, 111.46
We maintained our negativity for January moving into Thursday.
- The ECB’s disappointing outlook for the health of the European economy has placed ample weight that the bulls will need to lift.
- In the picture below, the labeled chart shows an ABC configuration. Note that C is not yet complete, and in order to be considered complete, it should drop to 104.75 at least.
- There is minor resistance at 107.60 to 107.80.
- The minor upside pivot is 108.00.
- We expect Jan to move below the Thursday low and see the minor downside pivot at 106.00.
- Below that level, however, Jan will test the key downside pivot at 104.75.
- A daily settle below 104.75 is extremely bearish.
Daily Moving Averages: 21, 55, & 100: -21.65, -22.21, -22.37
Weekly Moving Averages: 55, 100, & 200: -19.82, -21.64, –17.90
We have to say that we have been surprised by the strength of this ascent. Our view for Thursday was that Jan was getting close to a peak for this pattern.
- As once can see on the chart below, there is a 5 wave move labeled to the upside. Although we feel this pattern is drawing close to its completion, there is likely a marginal move higher before a turn ensues.
- This puts the target at -20.30 to -20.00.
- We are a seller of the rally at -20.30 with a stop over -20.00.
- The minor downside pivot that confirms a peak to the pattern is -21.25.
- Breaking below this level will give a quick drop to -22.00.
- The key downside pivot to this pattern is -22.50.
- The key upside pivot is -19.00.
RBOB S2 S1 CLOSE R1 R2 TREND
DAILY 25375 25525 25970 26235 26600 DOWN
WEEKLY 24440 26475 27614 28865 29890 DOWN
Daily Moving Averages: 21, 55, & 100:2.7048, 2.7791, 2.8700
Weekly Moving Averages: 21, 55, & 100: 2.8951, 2.9005, 2.8834
We have been manifestly bearish on this market since Jan hit the 2.80 level on expiration.
There is a 3 legged correction picture on the chart below, follow by an intermediate rally. Jan is now in the process of another ABC leg to the downside.
The prime reason for weakness lately is the huge build in the DOE inventories reported Wednesday. These ample supplies, combined with a 3.4% decline in US demand, has spooked the manic funds that were holding 28% of the open interest.
We are a seller of the rally.
There is minor resistance at 2.62 to 2.6250.
The minor upside pivot is 2.6340.
Our model calls for Jan to move below the Thursday low for a probable test of 2.55.
The key downside pivot on the continuation chart is a daily settle below 2.5375.
In this event, Jan is likely to fall to 2.45 to 2.44.
The key upside pivot on the intraday chart is 2.66.
ETHANOL S2 S1 CLOSE R1 R2 TREND
DAILY 2360 2385 2409 2425 2445 CONGEST LOWER
WEEKLY 2210 2350 2408 2472 2572 CONGEST
Daily Moving Averages: 21, 55, & 100: 2.387, 2.374, 2.458
Weekly Moving Averages: 21, 55, & 100: 2.468, 2.311, 2.451
We were looking for Jan to ease from the 2.445 level to see 2.40.
Jan appears to have marginally lower prices to come, and a drop to 2.39 to 2.385 is probable.
The downside pivot is 2.375.
There is key ratio support at 2.36.
The hourly chart has a series of lower highs and lower lows developing. However, it does not appear that these will develop into an impulse move lower. It is more likely that Jan congests lower on Friday.
There is minor resistance at 2.42 to 2.425.
The minor upside pivot is 2.43.
The key upside pivot is 2.45.
HEAT S2 S1 CLOSE R1 R2 TREND
DAILY 28885 29115 29430 29615 30300 DOWN
WEEKLY 27990 29345 30413 31330 32545 PEAK
Daily Moving Averages: 21, 55, & 100: 3.0157, 3.0780, 3.0637
Weekly Moving Averages: 21, 55, & 100: 3.0605, 3.0186, 2.9941
Our forecast for Thursday was for lower prices to develop.
We noted that a bounce off 2.98 seen on Wednesday would likely be sold into.
With the news out of the ECB, Jan ignored the violence in the Middle East, to plunge through the downside pivot at 2.9740.
It then fell to the key downside pivot at 2.9340. Although a bounce off of that important support level may be seen, we remain in a sell the rally mode.
There is initial resistance at 2.96 to 2.9650.
The minor upside pivot is 2.9750.
The key upside pivot on the intraday chart is 3.0060.
We would like to sell at 2.9650 with a stop over 2.9750.
Jan has initial support at 2.9150 to 2.91 if an intraday break of 2.9340 is seen.
However, a daily settle below 2.9340 will be manifestly bearish for the continuation chart, and will target 2.89 to 2.8850 as initial support.
NATGAS S2 S1 CLOSE R1 R2 TREND
DAILY 3505 3595 3647 3725 3815 DOWN
WEEKLY 2920 3355 3561 3990 4500 DOWN
Daily Moving Averages: 21, 55, & 100:3.706, 3.538, 3.243
Weekly Moving Averages: 21, 55, & 100: 3.190, 2.838, 3.419
Our outlook for Thursday was that Jan would move higher.
In the chart below, we have our model labeled; the 4 with the question mark relates to whether or not the corrective pattern that would retrace wave 3 is complete.
It appears that the move to 3.75 on Thursday completed an impulse move to the upside.
The rejection from 3.75 means there is likely more downside to come.
Nevertheless, in keeping with the model that labels 3.50 as wave 4, we expect the key pivot at 3.50 to hold.
However, initial support is at 3.60 to 3.59.
The minor downside pivot is 3.585.
We are a cautious buyer of the dip at 3.60 with a stop under 3.58.
Jan needs to get above 3.68 to demonstrate sufficient strength for another run to the 3.75 area.
On an intraday chart, 3.74 is the key upside pivot.
However, the daily chart needs to break above 3.81 to show renewed strength.
This market will bounce to and fro due to different weather models being employed. The European model used by most tends to be a lagging indicator. There are other models that show cold moving in more rapidly than its counterpart. This is the reason we are cautiously bullish.