April Crude Oil had an uneventful day Thursday as headlines that Iran hasn’t agreed to commit to a production freeze was met by ECB stimulus. The overnight session languished as traders waited for the ECB announcement on interest rates and QE. The ECB lowered it deposit rates by 10 basis points to -.40% and its refinancing rate by 5 basis points to 0.00%. The ECB also lowered the interest rate on the marginal lending facility by 5 basis points to .25%. It raised its QE by 20 billion Euro to 80 billion Euro per month. The ECB will include investment grade euro-denominated bonds issued by non-bank corporations for the first time in the purchase program.
Crude rallied to the high (38.48) of the day Thursday on the news and then headed to the low (37.21) of the day on the Iran news. Crude recovered and settled at 37.84. After settlement, crude grinded higher and ended the day at 38.02. Crude’s lackluster day left an inside candle in place showing a tired market. With seven new highs in a row it was bound to happen. It still closed above the 100 day moving average, so in my opinion bulls are still in control of the price action. With today the end of the week Crude could see some liquidation of longs into the weekend. If Crude trades below Thursday’s low, I would get short for a test of support at 36.27. If Crude breaks out above Thursdays high I would get long for a run to resistance at 39.02 the 40.19. Use stops appropriate for your account size and risk tolerance.
High – 38.48
Low – 37.21
Last – 38.02
Daily Pivots for 3/11/16:
|
R2 |
39.17 |
|
R1 |
38.60 |
|
PIVOT |
37.90 |
|
S1 |
37.33 |
|
S2 |
36.63 |
|
|
For those interested I hold a biweekly livestock webinar on Wednesday March 16, at 3pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon signup.
Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
