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Brent: Sell The Rally

Henry Marchell

DAILY 10476 10612 10702 10789 11015 DOWN
WEEKLY 8850 9914 10702 11233 11795 DOWN

Daily Moving Averages: 21, 55, & 100: 109.83, 110.42, 111.04
Weekly Moving Averages: 21, 55, & 100: 111.04, 111.04, 111.60

This market has been under pressure on the weakening economic picture in Europe and the prospects of tax selling.

• Moreover, there has been a steady exodus of hedge funds from the market place of late. Large funds are finding it difficult to operate in the current environment and regulations are likely to get more stringent rather than less so.

• To be sure the weather in Europe has been cold adding to the misery that is austerity. Nevertheless, the pick in demand is not extreme according to price and the pattern in gasoil.

• The irrationality of the markets can far outlast our ability to prove it wrong.Therefore we go with the flow until the flow shows signs of abating.

• To that end, Jan appears to have lower to go in the early part of the upcoming week.

• She will have minor resistance at 107.50 to 107.70. The minor upside pivot is 107.90. The key upside pivot to the intraday chart is 110.50.

• Our model sees Jan falling to test minor pivot of 106.00 Monday.

• However, it is with a break of that level that Jan will challenge the key downside pivot of 104.75.

• A daily settle below that mark will suggests a drop to the 99.25 to 99.00 or slightly below.

• We are a seller of the rally. This will be at 107.70 with a protective stop above 108.00
• A break above that line will net a charge to 109.50.

Brent Weekly