Nov Crude Oil: Crude oil set new 4Q highs on Monday at 8238 but mainly traded mixed for the session with most of the action contained within the 8200 to 8150 range. Prices settled marginally lower by 11 cents at 8147. Last week’s 3-day price surge depicts an underlying bull tone in the market, however, near term action alerts for Mixed to Bearish trading as RSI is reading overbought. There is room for another pop into key Resistance at 8265-8300 XXX where rallies are expected to fade and consolidate lower.
Heading into the pit session, momentum is leaning up, therefore sellers should take a scalping approach against 8175-8200 X and 8230-8238 XX Resistance zones. At 8265-8300 XXX, sellers can scale into short positions using suggested Stops above 8315 area. Failures at any Resistance level signals for mixed to lower congestion while a flip below 8155-8147 X Pivot/Settlement Support sparks selling to 8115 XX (overnight low) to 8077-7970 XXX and XXXX lower congestion Support.
On the upside, if we begin to stabilize above the 8200 mark, buyers can scalp against 8200-8175 and also against 8155-8147 X Support while targeting 8230-8238 XX and 8265-8300 XXX. All longs should cover in the XXX range. If 8300 is surpassed, the Bull leg will resume targeting 8385-8450 XXXX extension target range.
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Nov Cracks: Both cracks are trading lower in the overnight Globex session pretty much neck and neck as the Heat adds to yesterday’s losses while the Gas erases yesterday’s gains. Strength in the X/Z crude spread is contributing to the selling pressure on the cracks.
The Heat Crack is under pressure heading into the open as corrective trade continues from last week’s Bull run. We’re expecting to see buying come in against the 1410-1400 XX Support level which represents a 62% retracement of last week’s rally. Buyers can go long against XX using suggested Stops below 1390 with an initial target at yesterday’s lows at 1425-1437, then up to 1450-1460 X Pivot Resistance. Trade above 1460 indicates moderate strength to sustain rallies to 1480-1500 XX up to 1525-1532 XXX. On the downside, failures to trade back inside yesterday’s range above 1425-1437 is Bearish on the crack and jeopardizes the 1400 level. Trade below 1400 is likely to trigger a flush to 1370-1350 XXX target Support range.
The Gas Crack is expected to trade sideways to Bearish today after yesterday’s Doji Candle alerts for a pause or change in trend. Sellers can short rallies against 618-630, then against 645-650 X Pivot Resistance. Target range is at 600-585 XX with a chance to sweep down to 565-560 XXX Support. On the upside, buyers can scale into the 600-585 XX Support range off the pit session open as early trade holding there is likely to rebound and fill today’s Gap down targeting 618-630. An upside push above 650 Pivot has the potential to shift gears back to the Bulls targeting yesterday’s high at 675-680 XX while garnering strength for a move to 700 XXX.
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Nov Natural Gas: Natural gas prices gapped in lower into Monday’s session and fell to set new 4Q lows at 3686 before consolidating and closing at 3727 with losses of 7.0 cents on the day. The market is trading within a 9-day downtrend channel with today’s bias Sideways to Bearish on trade below the 3800 level. Bullish divergence on the RSI is of concern to the Bears and a flip above 3800 will shift near term action to the upside to correct the recent down leg.
Sellers can look to sell into the 3788-3800 X Resistance range with suggested Stops above 3825 as failures to trade above there keeps the action on the defensive and likely to continue to challenge the 3700-3686 XX Support target range. A punch through 3686 resumes Bear drives targeting the 2010 spot lows at 3640-3620 XXX Support.
On the upside, if the Bulls defend Settlement at 3730-3727 X Support in the primary session, minor buy scalping can be done with an objective at 3788-3800 X Resistance. Trade above 3800, as mentioned above, shifts the near term tone up with a target range at 3850-3880 XX Resistance where rallies should fade. Longs should cover and/or reverse short at XX Resistance for a decent short scalp back to the 3800-3788 range. Only trade above 3880 alerts for a sustainable Bull run targeting the 47-day downtrend line at 3945 XXX Resistance.
Dec E-Mini S&P: The S&P futures have been trudging sideways for the last 6-sessions in the 1150 to 1127 range as traders have been consolidating the September rally. Monday’s sell offs posted a double bottom at last week’s 1127 low which has prompted buying in the pre-market session, yet we still expect buyers to be reluctant to buy through 1150, therefore we’re maintaining a Mixed bias today.
Upward momentum may continue into the open, however, we’ll be looking for it to fade against 1147 XX and 1150-1153 XXX Resistance areas for shorting opportunities followed by a pullback to 1144-1140 and 1135 X Pivot Support. Trade below the 1135 X Pivot alerts for another drive down to 1130-1126 XX Support down to 1123 XXX Support.
On the upside, buyers can buy against the 1135 X Pivot Support on a scalping basis using 1140-1144 X Resistance to scale out initially. Trade above 1144 offers longs a chance to cover against 1147 XX and 1150-1153 XXX Resistance targets. A punch through 1153 will resume underlying Bull trends targeting 1156-1158 XXXX today and towards 1165 over the course of the week.
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