Summary for Week Ending 22nd July 2006
Needless to say, the middle east is the prime topic of conversation at present with events looking to escalate. As it stands we haven't seen any real impact on Oil, however this can pivot on a dot if the other Gulf states are drawn into this mess. Nothing here can be forecast and we are all stuck sitting and watching. If Oil does go for a gallop, expect the bears to be growling loudly.
Last week...
We continued briefly with the bearishness before we saw some bullishness return. The current setup would indicate a retest of the old low, however the speed of events would also say that things may not be over just yet. If the market is unable to decide what to do, then we will be range bound, and currently the range is very wide, stretching from the low of 1219 to the intermediate high at 1291. Although this is a very wide range, if we get no clear directional information then the market can be easily trapped in this space. It may seem a wide space but if the market does start bouncing around inside this space then things will get cramped fairly quickly. If we get a rally next week then I would expect the next problem area to be the 1280 region. If the bulls get spooked, and I think they will then we should see the market peel off before it gets too far ahead of itself. Times ahead look tough to play.
Where to ?
As per what I said in the previous, I think we may be range bound for a little bit. There is no interest in the long side and the short side has so far shown support above the old low so no one seems too sure what is going to happen next, and that includes me. If we get a run at Oil, then expect the range to be busted at the downside and this may be enough to flush the system and we can start building again.
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