Crude Oil: "Support Has Plenty Of Room To Breathe" Says Carl Larry

Well these numbers have plenty of room today. The overnight session set up a large range to the upside. We should also be thankful that the market has since retreated and pulled the RSI back to a “tepid” 64%. We’ll see how the US open gets going, but we certainly have a good idea of where resistance can play out above us. We’ll be looking at 11033, 11125 and 11215. Support has plenty of room to breathe if we decide to take profits from overnight; 10959, 10852 and 10677. The front spread of course rallied and resistance hits a peak to 91. Support has room to 71. Flat price may ease early, but higher is going to continue.

Gasoline: We’re moving on to RBV3. We’re certainly welcoming the new contract along at the right time. We see resistance here now at 29345, 29500 and 29750. Support falls back on 29215, 29127 and 28928. The front spread grinds higher with resistance to 440, 482. We think that support stays tight here to 423, 406. The RBCL looks to maintain it’s range of 1270 to 1370.

Distillate: We’re following HOV3 now. The HOV3 is lighting up the board and our switch on Monday was well timed on the chart. We see resistance here at 31877, 31976 and 32212. The support numbers fall back on 31717, 3177 and 31485. The front spread is range bound with support to +17, +12. Resistance looks to +28, +39. We see the HOCL test resistance at 2412, 2445. Support falls back to 2364, 2314.

Trends are only for the affected: Surprisingly enough, there’s not a lot to talk about on the 10min chart overnight. We see the chart here actually trending higher, but with a wide range now and a slow progression. This leaves it at a support line in the 10950 area, a pivot to the 11110 area and channel resistance to 11275. The 60min chart is not getting so much love here and we see the move overnight more as a breakout. We think that it leaves an uptrend, but the support remains from the earlier move and holds in the 10700 area.

Fundy you should mention: Pretty interesting move overnight on the way up to $112 in WTI. Volumes were much higher than nor-mal, but we have to remember that a lot of these black box funds are working 24/7. One thing that we might be sure of is that a lot of shorts are out of the market. For everyone who has been trying to keep up with the COT, you can see how ineffective it can be now. If we get a correction from today until Fri-day, all of the funds that look like they added length, will have covered before the weekend. We have little today outside of the EIA, but Pending Home Sales (-1.0) at 10:00am.

Sorry, I am just physically attracted: As usual, not much attention was paid to the APIs, but we’re here to give them to you anyway. We’re looking at Crude +2.47M, Gasoline –1.12M, Distillate +3K and Cushing –863K. Nothing to write about here, but that gasoline draw was right up our alley. We figured that the margins were still pretty weak and demand was going to look good headed into the holiday. The other part that we thought was very interesting was the draw down in Cushing. For all the hype about Seaway shutting in last week from a data provider, we didn’t see any effects. I figure that we’re going to hear an excuse on what happened, but a lesson learned here kiddies, Seaways averages between 290K and 340K. No more, no less.

By Carl Larry