Energy Complex Resurrects 2016 Bull Trends, Re-exposes Potentially Major Gains

December 12, 2016 2:27AM CST

JAN CRUDE OIL

In Thur's Technical Blog we discussed the very bullish prospect that the past 5-month span of aimlessly choppy price action may be the corrective "coiling-up" before the market explodes higher one day and confirms the resumption of Feb-Nov's major uptrend in no uncertain terms.  Today's clear break above the past SIX MONTHS' highs ranging from 09-Jun's 51.67 high to last week's 52.42 high could arguably be that pivotal day.  As a direct result of today's resumption of the past month's rally the daily log active-continuation chart below shows that the market has identified Thur's 49.61 low as the latest smaller-degree corrective low and new short-term risk parameter this market is now minimally required to fail below to threaten a broader bullish count.  Former 52.42-to-51.67-range resistance is expected to hold as new support ahead of further and possible steep, even relentless gains.

Crude Light Daily

On a short-term basis the 240-min chart below shows the market's resumption of the past month's uptrend that nullifies the recent bearish divergence in short-term momentum and chalks up the recent sell-off attempt from 52.42 to 49.61 as a mere corrective affair consistent with the broader uptrend.

Crude Light 240

Crude Light Weekly

Today's break above last week's 52.42 high confirms the uptrend on ALL SCALES.  Market sentiment figures are understandably getting high, but this MEANS NOTHING until and unless the market proves weakness below a recent corrective low like 49.61 needed to stem the clear and present uptrend.  Today's break to new highs reaffirms this YEAR'S uptrend consistent with our long-term bullish count that contends Feb's 26.05 low COMPLETED the secular bear market from May'11's 114.83 high shown in the monthly log scale active-continuation chart below.  We believe the market to still be in the relatively early stages of a major correction or reversal of 2011-2016's 114.83 - 26.05 decline that could eventually produce gains to the 75-to-95-range.

The monthly log scale chart below also shows the market currently flirting with the (54.69) 50% retrace of 2011 - 2016's entire 114.83 - 26.05 decline.  While interesting, traders are reminded that such merely derived technical levels like Bollinger Bands, channel lines, the always-useless moving averages and even the vaunted Fibonacci relationships we cite often in our analysis never have proven to be reliable reasons to buck a trend without an accompanying momentum divergence needed to stem the clear and present trend.  And they never will.  Thus, this 54.69 50% retrace is NOT considered resistance.

These issues considered, shorter-term traders whipsawed out of bullish exposure following Wed's bearish divergence in short-term momentum are advised to re-establish a bullish policy and first approach setback attempts to suspected support from the 52.50-area OB as corrective buying opportunities with a relapse below 49.60 required to negate this call and warrant a return to the sidelines.  Longer-term players remain advised to maintain a full and aggressive bullish policy with a failure below 49.60 required to pare bullish exposure to more conservative levels and subsequent weakness below 29-Nov's 44.82 larger-degree corrective low and key long-term risk parameter required to jettison the position altogether.  In lieu of at least sub-49.60 weakness we anticipate further and possibly accelerated gains with former 52.42-to-51.67-range resistance considered new near-term support.

Crude Light Monthly

JAN HEATING OIL

The technical construct and expectations for diesel are identical to those detailed above for crude oil with Thur's 1.6066 smaller-degree corrective low considered our new short-term risk parameter this market is now minimally required to fail below to threaten a long-term bullish count.  Former 1.6775-to-1.6350-range resistance is considered new near-term support ahead of further and possibly steep, even relentless gains straight away.

In sum, long-term players remain advised to maintain a bullish policy and exposure with weakness below 1.6066 required to pare bullish exposure to more conservative levels and subsequent weakness below 29-Nov's 1.4684 larger-degree corrective low and key risk parameter required to neutralize the position altogether.  Shorter-term traders with tighter risk profiles whipsawed out of bullish positions following last Wed's short-term mo failure are advised to first approach relapse attempts to the 1.6650-area OB as corrective buying opportunities with a failure below 1.6066 required to take defensive steps.

NY Gasoline 240 min

NY Gasoline Daily

NY Gasoline Weekly

NY Gasoline Monthly

JAN RBOB

Similarly, overnight's break above 05-Dec's 1.5789 high reinstates this year's major uptrend and leaves Thur's 1.4840 low in its wake as the latest smaller-degree corrective low and new short-term risk parameter this market is now minimally required to fail below to threaten our bullish count calling for further and possibly steep gains straight away.

NY Gasoline 240 min

NY Gasoline Daily

The daily (above) and weekly (below) log scale charts show the trend is up on all scales and should not surprise by its continuance or acceleration.  Former 1.5150-area resistance from late-Oct is expected to hold as new support.

NY Gasoline Weekly

The monthly log active-continuation chart below shows that, unlike the two markets above, RBOB has yet to break its May high of 1.6707 posted by the then-prompt Jul contract.  Nonetheless, the merely lateral price action from that May high is considered corrective/consolidative and warns of the eventual resumption of Feb-May's uptrend that preceded it.  Here too we believe Feb's 0.8975 low COMPLETED the secular bear market from Apr'12's 3.4278 high and that the market is still in the relatively early stages of a major correction or reversal higher that could span quarters or even years ahead and a run at the 2.18-to-2.50-range.

In sum, a bullish policy remains advised for longer-term players with a failure below 1.4840 required to pare exposure and subsequent weakness below 29-Nov's 1.3638 larger-degree corrective low and key risk parameter required to negate this call altogether.  Shorter-term traders whipsawed out of bullish exposure on last Wed's mo failure are advised to reset bullish exposure by first approaching setback attempts to 1.5500-OB as corrective buying opportunities with a failure below 1.4840 required to move back to the sidelines.  In lieu of such sub-1.4840 weakness we anticipate further and possibly steep gains straight away.

NY Gasoline Monthly


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