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Will
Fed head Ben Bernanke raise Fed Funds another ¼ point or will he stand
pat? Maybe he’ll change his wording to, “…expect future increases”. Maybe not, Maybe, maybe… Then again, does it all really matter? LATE BREAKING NEWS: NEW
YORK (MarketWatch) -- Crude ended just shy of its record high Monday
after industry giant BP PLC threw the market into a spin by shutting
down 8% of the country's oil output to fix a leaky pipeline. [BP is shutting down its Prudhoe Bay oil field in Alaska]
http://www.marketwatch.com/News/ A
senior Israeli officer told DEBKAfile: We can go on bombing Lebanon for
many weeks, but that will not stop the rockets. http://www.debka.com/ I’ve been talking a lot about the Middle East and by extension Oil, so let’s take a look and see whether Crude is confirming the ‘Bullish’ news (or if the bullish news is warranted by the charts)?
Chart 1 - Crude Oil very Bullish The chart of Crude Oil has been showing text book action. A breakout from a triangle formation (green lines) in late June and subsequent re-test in late July. The re-test looks successful and the MACD and RSI have turned upwards. The next level of resistance comes in at the July high of $79.86 (blue line). A break above that high brings $90 Oil squarely in focus! Will it happen? The market is certainly acting as if it will. But why speculate, we’ll find out soon enough! One thing’s for sure, the public is conscious and well aware of the effects of Higher Oil– Less money to Spend! Here’s another significant development to watch:
Chart 2 - 30-Year Bonds (top) Dow Jones Industrial (bottom) The 30-year Bond recently broke above resistance at 108.5 (interest rates moved lower). The Bonds are undoubtedly saying that a combination of weaker than expected Job numbers, housing, retail and now, higher Oil prices are all Signalling an economic Slowdown. Interestingly enough each low in Bonds preceded the corresponding low in the Dow by roughly 1 month (blue lines). If this correlation continues it will signal that the Dow will break above resistance at 11200 – 11300 by early September. So
get this, a rising Oil price combined with an already soft economy
causing the Stock Market to RISE! The markets are celebrating, “No More Rate Rises Thank You Mr. Bernanke!” This article is intended solely for information purposes. The opinions are those of the author only. Please conduct further research and consult your financial advisor before making any investment/trading decision. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis. CONTACT
INFORMATION The opinions of FSU contributors do not necessarily reflect those of Financial Sense. |
