
09 Dec 12102018 Weekly Big Picture
12102018 Weekly Big Picture
This is part of my weekly preparation of my trading week to give me an idea on where I think the market stands.
The Big Picture
- WTI
- What happened last week?
- Last week was different because there was an OPEC= meeting scheduled on Thursday that was undecided in the outcome till Friday.
- Obviously the big news was that they decided to cut more than they initially said. Initially was said that they would cut 900.000 — 1 million bpd but that got upped to 1.2 million bpd. The cut was 800.000 evenly divided by the OPEC members, with exemptions for Libya, Iran and Venezuela. The other 400.000 is being filled by the non-OPEC member allies led by Russia.
- The Permian basin may have twice as much supply as initially thought so that would put the US on the map as a a huge oil supplier next to Saudi Arabia and Russia. Just this week the US had their first net export of oil.
- The US is definitely ‘stepping up’ their oil-game
- On the other side of the pond we have China buying more Iranian oil now that waivers are in place
- President Maduro of Venezuela has said to put in place a system where Venezuelan oil will only be bought by Petro cryptocurrencies
- That would mean it will be the first state-backed oil-backed digital currency
- Cryptos moving a step closer to world-acceptance on a global scale
- On a technical note
- On the higher time frame we can see that we are just under the 52.75 level
- The weekly shows an indecision doji which makes sense with the OPEC meeting and all
- The bullish outcome of the meeting could put more buying pressure in the market but we shall see how the market will react to this news
- After the news we did shoot up about 250 pips breaking through the 4H 50MA during the NY session on Friday
- Then we had some indecisive PA before we dropped back down during the late hours of the NY session to return to the same 50MA to CAS
- We are also at the same level on the 30M chart where we might be CAS the 30M 50MA
- So based on this it does look bullish if we can hold this 52.25 level
- But it would be more bullish is if we broke through the 52.75 level so let’s wait and look for signs on an effort to do so
- The bullish outcome of the meeting could put more buying pressure in the market but we shall see how the market will react to this news
- What is the supply and demand balance?
- When looking at the oil inventories report by the EIA, it was forecast a fall of ‑0.942M but the “actual” number was ‑7.323M so heavily over the amount that was expected meaning extra bullish
- And then on top of that there was the OPEC+ meeting with the more than expected cuts so that screams more bullishness into the market by rebalancing oil production
- What is the market sentiment?
- What does Retail Sentiment state?
- There is definitely a higher bullish sentiment by retailers according to https://bluegoldresearch.com/retail-sentiment-crude-oil
- Which would be in line with the news and what we can see on the charts but let’s see how that actually translates into PA trading next week
- There is definitely a higher bullish sentiment by retailers according to https://bluegoldresearch.com/retail-sentiment-crude-oil
- What does investing.com state?
- Last week’s sentiment numbers
- All sentiments is 58% bullish
- Last week 60% bullish
- Last 3 days 65% bullish
- This week’s
- All sentiments is 58% bullish
- Last week 63% bullish
- Last 3 days 61% bullish
- We increased over the course of the week but then pulled back on sentiment
- Last week’s sentiment numbers
- What does Retail Sentiment state?
- What was in the reports?
- When looking at the oil inventories report by the EIA, it was forecast a fall of ‑0.942M but the “actual” number was ‑7.323M so heavily over the amount that was expected meaning extra bullish
- What is the Tick Volume showing?
- What happened last week?
Week | Monday | Tuesday | Wednesday | Thursday | Friday | Week | |
11/26 — 11/30 | 12/03/2018 | 12/04/2018 | 12/05/2018 | 12/06/2018 | 12/07/2018 | 12/3 — 12/7 | |
High | 52.525 | 53.83 | 54.537 | 54.42 | 53.28 | 54.2 | 54.537 |
Low | 49.385 | 50.555 | 52.405 | 52.125 | 50.055 | 50.57 | 50.055 |
Close | 50.555 | 53.06 | 52.57 | 52.91 | 51.694 | 52.21 | 52.21 |
Pip move | 314 | 327.5 | 213.2 | 229.5 | 322.5 | 363 | 448.2 |
PP | 50.822 | 52.482 | 53.171 | 53.152 | 51.676 | 52.327 | 52.267 |
R1 | 52.259 | 54.409 | 53.937 | 54.179 | 53.297 | 54.084 | 54.479 |
R2 | 53.962 | 55.757 | 55.303 | 55.447 | 54.901 | 55.957 | 56.749 |
S1 | 49.119 | 51.134 | 51.805 | 51.884 | 50.072 | 50.454 | 49.997 |
S2 | 47.682 | 49.207 | 51.039 | 50.857 | 48.451 | 48.697 | 47.785 |
TV | 1,008,709 | 211,252 | 141,633 | 102,902 | 351,292 | 376,998 | 1,436,979 |
- We had the biggest intraday swing on Friday, which could be because of the initial indecision and then decisive move up during the early hours of the NY session when more liquidity came into the market
- What are the most important technical levels in the market?
- The weekly pivot point shows us that most week we have been trading around this point after we gapped up last Monday moving away from the 50.80 level of the previous week
- With highest and lowest levels respectively being 54.40 and 50
- How far is the market from important technical levels?
- When we look at historical levels of support and resistance we can see that 53.75 is a resistance level to keep an eye on
- On the support side we have the 50.50 level
- On the 4H chart we can see that 52.50 is a level of potential resistance as well since we ducked back underneath it at the end of the NY session
- Since we just closed the week at 52.21 we are very close to the 4H resistance level of 52.50 so on Monday we could be first ranging at these levels since we are only 30 ticks away from this resistance level
- But on the downside we are 200 ticks away so more space to the downside which could mean we will first make a move downwards before loading up for a potential BO, if any
- When we look at historical levels of support and resistance we can see that 53.75 is a resistance level to keep an eye on
- How far is the market from important technical levels?
- Is the market trending up or down?
- As mentioned earlier, we can see on the daily chart that we are range bound between the 50.50 and 53.75 levels and thus we haven’t initiated an up- or downtrend yet unless we break these levels. At least not on the higher time frames
- On the 30M chart we can see that when price ducked under the 52.50 level we have hit a shorter term support area of the 30M VWAP 1.5 SD which could mean that we can see a short-term reversal at this level to confirm 52.50 as resistance or perhaps this could be the battleground to decide to BO from this level. We will see how we open on Monday.
- Is there an OPEC meeting?
- OPEC meeting has just been held. The next one will be April 2019, the 176th ordinary meeting.
- Energy sector
- How is the sector as a whole doing?
- US
- 1 month
- -10.45%
- 3 months
- -13.46%
- YTD
- -12.93%
- In comparison to last week’s review we can see that in the last month we went from ‑4.77% to now ‑10.45% so that’s a significant drop for the US energy sector as a whole. 3 month mark hasn’t changed much and the YTD dropped 2 more points
- 1 month
- The Americas
- 1 month
- -10.19
- 3 months
- -12.74
- YTD
- -13.72%
- Same can be said for the Americas energy sector with their number following the US energy sector closely
- 1 month
- Europe
- 1 month
- -6.85%
- 3 months
- -5.23%
- YTD
- -3.54%
- The Europe energy sector went in the last month from ‑1.94% to ‑6.85%, with 3 month staying nearly the same and YTD dropping 2 points from ‑1.20%
- 1 month
- Asia
- 1 month
- -6.39%
- 3 months
- -10.07%
- YTD
- -8.72%
- It looks like the Asian energy sector is following suit with a drop of 5% in the last month as well just like the other markets. In contrast, the last 3 months the Asian market dropped an additional 2.5 points from 7.49%. The YTD dropped 4 more points.
- 1 month
- Middle East / Africa
- 1 month
- -11.47%
- 3 months
- -5.35%
- YTD
- -7.23%
- The MIddle-East /Africa energy sector dropped 2.5 points in the last month and only 1.5 in the last 3 months. YTD we dropped only 2 points from 5.03%
- 1 month
- US
- How is the sector as a whole doing?
- EURUSD
- What is last week’s price range?
- 1.131 to 1.142 so we went up a little in our range in comparison to the prior week
- What is the market sentiment?
- According to IG the sentiment dropped from 60% last week to 57.5% and shows a mixed bullish bearish sentiment
- What is last week’s price range?
- Gold
- What is last week’s price range?
- We had a significant move up in gold ranging last week from 1221 to 1248
- Due to more geopolitical instability?
- We had a significant move up in gold ranging last week from 1221 to 1248
- What is the market sentiment?
- Last week according to investing.com
- All sentiments 68% bullish
- Last week 64% bullish
- Last 3 days 63 % bullish
- This week:
- All sentiments 68% bullish
- Last week 65% bullish
- Last 3 days 67 % bullish
- Longer term sentiment has stayed the same however sentiment of the last 3 days increased by 4 points.
- Last week according to investing.com
- What is last week’s price range?
- Geopolitics
- What are the main drivers in geopolitics?
- The Mueller investigation is still ongoing
- The US strongly opposes discontinuing support to the Saudi-led coalition in Yemen’s war and will remain engaged in efforts to combat Iranian influence and Islamist militancy in the Arab state
- Saudi Arabia, the UAE, Bahrain and non-GCC member Egypt cut diplomatic and economic ties with Qatar in June 2017 over allegations of supporting terrorism
- The Gulf Cooperation Council GCC annual summit was set to open in Riyadh on Sunday, with regional unity imperiled by a bitter row with Qatar and the host, Saudi Arabia, facing a diplomatic crisis over the murder of journalist Jamal Khashoggi investing.com reports
- Iran’s Rouhani says sanctions may lead to drugs, refugee, bomb ‘deluge’ in speech carried live on state television
- What are the main drivers in geopolitics?
Feedback?
Any questions or feedback you might have please feel free to leave a comment or contact me directly.
Sources:
- https://www.investing.com/commodities/crude-oil-scoreboard
- https://bluegoldresearch.com/retail-sentiment-crude-oil
- https://www.investing.com/commodities/gold-scoreboard
- https://www.bloomberg.com/research/sectorandindustry/sectors/sectordetail.asp?region=US
- https://www.investing.com/commodities/crude-oil-scoreboard
- https://www.investing.com/economic-calendar/eia-crude-oil-inventories-75
- https://www.dailyfx.com/sentiment
- https://www.bloomberg.com/energy
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