Thursday, November 17, 2016 was rollover day in Crude Oil. The January contract became the lead contract over the December contract as its volume surpassed the December contract. The December contract expires on Monday, November 21. Thursday’s early action saw January Crude Oil test resistance up at 4717 (50 DMA) reaching 47.12. Bulls couldn’t maintain the momentum and Crude Oil spent the rest of the session in retreat. Crude Oil settled at 45.98 and continued lower after settlement making the low of the day at 45.47 and it ended the session at 45.50. With three days of short covering after making its low (42.20) for the move on Monday on constant headline grabbing statements from OPEC, crude oil’s current supply glut won the day over a possible OPEC agreement to cut production. A strengthening US Dollar also played a big role in the days decline. With crude oil inventories increasing again last week it is going to take a strong, verifiable commitment from OPEC on production cuts to bring about a reduction in the supply glut. Then to maintain the lower production levels, OPEC will need cooperation from NOPEC (Russia mostly). They also need US producers to stay out of the way (fat chance). If Crude Oil breaks down below the Thursday low (45.47) price may test support at the 13 DMA (44.84) and then the 200 DMA (43.98). A rebound off the low could lead to a test of resistance at the 100 DMA (46.08), the 21 DMA (46.39), and then the 50 DMA (47.17).

 High    47.12      

 Low     45.47

 Last     45.50

Daily Pivots for 11/18/16:           

R2

47.68

R1

46.59

PIVOT

46.03

S1

44.94

S2

44.38

     

                           

                                        

                          
If you are interested in a Managed Futures program for Crude Oil, check out this offering from Walsh Trading:

Walsh Asset Management Introduces Bluenose Capital

For those interested I hold a weekly livestock webinar on Friday, November 18 at 2:30pm. 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.

Sign Up Now

 

Ben DiCostanzo

Senior Market Strategist

Walsh Trading, Inc.

 

RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING.  THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT.  WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.