Oil Technical Analysis for July 11, 2011
Light Sweet Crude
The CL market fell hard on Friday as the jobs report out of America was so weak. However, it should be noted that the selling stopped right at the $95 support area, so this could show more underlying strength in the market than most people understand. The next thing we are looking for is a supportive candle from which to buy this market.
The Brent market had a fairly neutral day as the charts formed a doji right at resistance. This could signal a little bit of a pullback, or it could signal that the market is so strong, that it held its own ground as the bad news from the US came out. Either way, we are waiting to see if we break $120 to buy this market. If we get a pullback, we would be interested in buying the market on signs of support as well.
Oil Fundamental Analysis for July 11, 2011
Crude oil prices fell heavily on Friday after the jobs report showed U.S. employers added only 18,000 jobs in June well below expectations of 105,000 added jobs, which spread pessimism among traders and increased risk aversion in markets, as investors sold higher yielding assets including crude oil and bought safe assets and lower yielding currencies including the USD, which pressured crude oil prices to drop heavily and nearly erase all of last week’s gains.
If pessimism continues to dominate financial markets, we should expect crude oil prices to remain under pressure , noting that markets lack any major fundamentals on Monday, and accordingly, we expect calm trading to prevail in markets, but overall we expect crude oil prices to remain under pressure.
Monday July 11:
The day lacks fundamentals from the euro zone and the United States yet the focus will be on the euro area finance ministers meeting in Brussels as they are to discuss the bailout for Greece amid recent default warnings from rating agencies on the private sector participation in the new package.
Natural Gas Technical Analysis for July 11, 2011
The natural gas markets found themselves forming another hammer at the end of Friday, showing that the area that we find ourselves in is indeed support. The trading signal on this market is quite simple: buy on a break of both the Thursday and Friday highs. We don’t like selling until we can hold under the $4 for a daily close.
Natural Gas Fundamental Analysis for July 11, 2011
Natural gas prices rose on Friday to recover some of Thursday’s losses after the EIA report for natural gas inventories showed a bigger than expected rise. Nonetheless, weather forecasts suggest that temperatures next week will be higher than their average for this time of the year in Midwest of the United States, which pushed natural gas prices higher on Friday.
Expectations of warm weather conditions could push natural gas prices higher , since it will increase speculations of rising demand for power-plant fuel to meet cooling demand.
Gold Technical Analysis for July 11, 2011
Gold markets rose on Friday after the Non-Farm Payroll numbers came out at only 18,000 jobs added in June. The fear trade seems to be driving this market at the moment. However, the why doesn’t matter – only the what. And the what is that this market is a buy only market currently. We think the $1,550 area might be resistance that can provide a dip form which to buy.
Gold Fundamental Analysis for July 11, 2011
Gold ended last week with strong gains and starts Monday with expected volatility as the pessimism remains dominant and with light fundamental load the metal might be pressured by some correctional moves.
The focus with the beginning of the week will be again on the debt crisis as the market trades pessimistically in light of the jobs report, as Asian markets are expected to start Monday with a downbeat reaction to the weak numbers.
Attention will also be given to the euro area finance ministers meeting in Brussels. The meeting holds strong importance to the market since finance ministers are expected to discuss the new round of aid for Greece and with the fear of a selective default to be given to Greece under the conditions of the private sector’s involvement.
S&P last week warned of this possibility so did other rating agencies, yet the problem is that news reports suggested that no agreement has been reached yet on their participation on the bailout which might cloud the talks this meeting and end with another opening ending and no news on the bailout.
Investors will continue to focus on comments from the finance ministers as the market trades in the wake of the abysmal jobs report, leaving the pessimism the dominant theme which is still upside support for gold unless a strong breakthrough is seen on the bailout for Greece which
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