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Early strength followed by further weakness

Published Tuesday, July 7th, 2015

Bulls were knocked out and completely obliterated yesterday. It has taken them almost twelve hours to get up from the floor but they are still feeling very dizzy and disorientated. It seems that not only did they lose the battle but also the war. After yesterday’s sharp and fierce sell-off it is impossible to paint an even remotely bullish technical picture. Supports were closed below and the daily slow stochastics are firmly negative on every contract. We could see some upside retracement today which would not be surprising as bottom-pickers could provide some short-term support to the market but such a strength is not expected to last, the downtrend should resume shortly and the nearest supports should be under serious pressure. The fall in WTI was halted by the 52.31 correction point support yesterday. It is the 50% retracement level of the weekly uptrend from March to May. Logically, if or when the expected close below this support occurs the contract should head towards the 61.8% c/p of the same move up which is at 49.88.

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.