European leaders brought the Greek crisis to a temporary end. They approved the long delayed aid. The leaders have said this will fix the Greek problem. It will NOT. It is a smoke and mirror solution at best, but it is what the investing world has to live with. They also discussed a solidarity fund to help suffering members states from economic shocks. They alluded to the mechanism being ready during 2013. Neverthele43ss, the weaker German PMI had a negative effect on the equities there. Their PMI slumped to 46.3 from 46.8. The EMU Q4 GDP is expected to contract.
It is only a matter of a week or so that Assad will be forced out of Syria. But once that occurs there is likely to be an all out civil war. The Sunnis and the Shia (Alawites) will battle for control. In a separate but related issue, the U.S. has sent Patriot missiles to Turkey.
Hugo Chavez’s illness deepens and arrangements are in place for a transfer of power. His successor will be the Vice President, who’s name escapes us at the moment, but we will find out.
On a brighter note, Chinese Flash PMI was reported at 50.9. That was the highest reading in 14 months and the fifth consecutive month a rise was seen. The Chinese stock market soared 5%.
Crude: Hi: 86.92; Low: 86.07
Jan has yet to break above the upside pivot that will confirm, a move to test the 87.70 pivot. It is with a break of that level that Jan will pop to 88.20 to 88.30. This is likely to be firm resistance on the first pass. There will be minor support at 86.50 to 86.40. The minor downside pivot is 86.20. The key downside pivot to the intraday chart is 85.80. Removal of that level will test the bear’s resolve to push Jan over the fiscal cliff. That is what it will take for that support to be broken. But once it is do not buy the first dip. The spreads have strengthened in the last two days. That may be refineries coming back on line.This will be a two way market.
BRENT: Hi: 107.45; Low: 106.55
Basis the continuation chart our model suggested that February would come on board manifesting the correction that was needed for Jan. This will be a two way market with Feb having initial support at 106.80 to 106.60. The key downside pivot to the intraday chart is 106.30. The continuation chart would have a finished downside look to it with a test of 104.75. But it should be noted that spreads are steady to stronger.
RBOB: Hi: 2.6340; Low: 2.6043
Jan is jumping off trend support at the 2.5950 area from Thursday. T^his trend has held on five tests. Although Jan appears to have completed a minor move higher off that support, it is likely to continue higher following a dip. There will be minor support at 2.6150 to 2.61. The minor downside pivot is 2.6050. The key downside pivot is 2.5895. This will be a two way market for Friday.
DIST: Hi: 2.9766; Low: 2.9450.
Jan has impulsed (trended) higher off the Thursday low of 2.9416. Jan is likely to back off from pivot resistance at 2.9785. However, with minor support at 2.9550 to 2.95. The minor downside pivot is 2.9450. That will change the nature of this pattern if broken. The bulls will need to push Jan above the upside pivot of 2.9780. Success in that venture is likely to net a tag of 2.9950 to 3.00. The key downside pivot is 2.89.
NAT: Hi: 3.361; Low: 3.293
Jan has a rendezvous with the 100 DMA at 3.26 Friday. Although a daily settle below that average will spell D-U-M-P, an intraday break will waltz Jan down to the rollover gap left by the November expiration. That gap begins at the 3.19 level and falls to 3.07. It is conceivable that Jan can travel that far with bull capitulation. Jan will have minor resistance at 3.36 to 3.38. The minor upside pivot is 3.39. The key upside pivot is 3.48. We would buy the sharp drop to the gap, but will stand aside from probing anything higher than that.
GASOIL: Hi: 922.75; Low: 915.25
Jan has a similar pattern to that of its cousin heating oil. The pattern suggests that Jan will retrace a little before trying to better the minor upside pivot of 924.00. There will be minor support at 915 to 914.. The minor downside pivot is 911.50. It is with the removal of 924.00 that the character of the pattern changes to a more bullish outlook. This will lead Jan to the 9+30.00 to 931.00 zone.