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Be prepared for erratic action. Watch the b/b pivots.

Published Tuesday, August 25th, 2015

Introduction.  The market is in a vicious and relentless down trend. Targets lower were hit yesterday on Brent to 42.59; Heat to 141.35; and RBOB to 144.75. The only contract to close below its target was Heat and this contract now has a further objective down to 137.18. WTI still has an objective to 36.94 and Gasoil to 410.75. The key technical indicators are mostly negative other than a curiously positive stochastic on WTI. Needless to say all stochastics are very low, and were they to turn positive would probably do so with bullish divergence. This is already the case with WTI, and is flagging a market that is in a highly dangerous condition. With this in mind – namely the danger of a vicious correction – one should use yesterday’s bull/bear (b/b) levels as key pivots, i.e. above them and cut back shorts. The b/b pivots are at 39.11 WTI; 43.85 Brent; 142.49 Heat; 150.29 RBOB; and 433.50 Gasoil. Moves over these pivotal resistances would be a sign of more of a correction higher and tests of the 5 day, and possibly the 8 day, MAs, which are sales.

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Posted by Robin Bieber