RJO FuturesCast

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Energies

Oil is Coiling

Posted 10/12/2017 3:07PM CT | Michael O'Donnell

In the past week, oil has dealt with the monthly unemployment report, various OPEC and Fed speak and this morning’s weekly EIA report. Yesterday’s FOMC minutes steered more towards inflationary caution than the prior month, or many months past for that matter, while this morning’s EIA inventories showed a 2.7 million barrel draw for the previous week.

In the two hours following the report, oil traded in most of the range of the $50 handle while mostly above the hourly 100 moving average, and psychologically significant $50 level and below the 50 period. It is interesting to note the potential coiling price action over the longer term between these moving averages and 2 point trend lines drawn from the August 30 and October 9 lows, and September 29 and October 11 highs.

Many see oil as range bound around the averages’ flat rate of change and $50 level, between the defining points of the previously mentioned trend lines. Any close above or below these trendlines and/or there defining points should see significant follow through.

 

Nov ’17 Crude Light 240 min Chart

Nov '17 Crude Light 240 min Chart

Nov ’17 Crude Light 60 min Chart

Nov '17 Crude Light 60 min Chart

Michael O'Donnell

Mike started his career in the markets on the floor of the Chicago Board of Trade as a trade checker for a local market maker in the Dow Futures pit. This led to interning with an independent introducing broker and going on to work with a number of market participants including: speculating clients, hedge clients, introducing brokers, futures commission merchants, commodity trading advisors, proprietary traders, trading educators, system creators, and a number of international financial market participants.