Crude Oil Prices December 14, 2012, Technical Analysis
Light Sweet Crude
The light sweet crude markets try to rally during the session on Thursday, but failed as the 80 $80.00 level offered far too much resistance. This market originally would have gotten a boost from the Federal Reserve and its extension of the quantitative easing policies that we’ve seen over the last couple of years, but it appears that the markets are taking this more negatively than previous times that the Federal Reserve has stepped in and pump the markets full of liquidity.
Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
This may be because the markets are focused more on the so-called “fiscal cliff” at the moment, and the Federal Reserve moving in that direction was a huge surprise. The candle for the day looks very bearish as it is a shooting star at the bottom of the fall, and it does look like we’re going to attempt to break down below the $86 level again. With this being said, we feel that this market will continue to grind sideways with a downward bias, until it eventually breaks through the $84.00 level which would signal math selling.
The bread markets had a very similar session on Thursday as the market trying to break above the $109.00 level, only to be rejected and sent back down to the $106.70 area. This market currently sits above a fairly significant support zone between $105.00 and $106.00, so we are hesitant to start shorting here. However, we do see that this market is more bearish than bullish, and as such will sell rallies as they come. Also, if we managed to break down below the $105.00 level, we are more than willing to go short at that point time.
This market will always be subject to headline risks coming out of the Middle East, so that of course can always play havoc with your trade, however, we do think that the demand equation as such that this market should continue to grind lower over the next couple of months. If that’s the case, we want to start shorting heavily at $105.00, or fade any rally that shows any signs of weakness going forward.