Summary for Week Ending 25th March 2006
Oil did nothing this week, perhaps on the back of absolutely nothing new to report. Perhaps the quiet times following such headiness in the news (in fact anything that seemed related to Oil was reported) has everyone bored and those who were savaged are licking their wounds in preparation for another assault. Who knows, but I cant see Oil staying in a holding pattern for too long. There's is simply too much of the stuff lying around in volatile parts of the world.
Last week...
I was mildly bullish in reaction to the markets itself but I tempered this with a nod to the nearby range equality which may have provided an element of resistance. As it turned out we never got to the range equality mark and instead we saw the market banging its head up against the 1310 level that we saw the week before. On the Mar 21 date we saw a wide range day down to the next line of support, that being the new line I placed on last weeks chart and the market seemed to pay some respect to this level by staying above it. The interest for me is the fact that the market rebounded off this line.. sort of. It certainly wasn't impressive and in comparison to the previous week its certainly a whimper.
So what's happening ?
Things are still confused with numerous signals coming giving opposing opinions. We saw a sneak to a new high by 1 point on Tuesday and then a solid decline so we have a tiny false break, but nothing that I believe to be technically significant. From the Low that we got on that day the market stuffed around for another three days, constantly failing to get on with it in either direction (is the money truly that scared?) and certainly failing to take out the high and establishing a rally. This behavior is certainly of the non-confident variety and since we had such a strong time the week before it seems as though the punters are waiting for something or someone to take a lead in these matters. The current shape is now very weak and a break below the 1295 support line may see a run to the next level of technical support which is the 1268 low. It should also be noted that this level is obvious so if we see it then don't expect it to hold for too long. It will be full of easy to spot stops that can easily be fired if the environment permits. On the upside the support has so far held and we may be seeing a basing pattern prior to a run. If this is so then it has to happen early in the week, otherwise I would expect sentiment to sour quickly and a run to the door to see how may stops are sitting below the 1295 level (not many as this is non obvious). Wait and see.
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