As noted last week, the maturing of the Balance Phase, 86s-89.50s, continued to develop an inventory imbalance as the market began the week coiling, 88s-89.50s.
This Balance developed following the Stopping Point at/near 86s (Nov-Dec 2012 Major Structural Support). The failure of the sellside to drive the market below 88s was a key clue to the pending inventory imbalance/breakout potential .
Following the coil at/near the Balance Area High, 89.50s, the market encountered the upside breakout & buyside directional phase midweek. The low usage area visible here above the Balance Area High, 89.50s, indicated the high probability of price discovery back into the Overhead Supply Cluster, 92s-94.50s, as the auction mechanism fills in such low usage. This Structural Development superseded Statistical Projections as the market traded to the Weekly 2nd Std Dev High, 90.03s, ultimately greatly exceeding it. The market rallied into the Overhead Supply Cluster toward 94s before closing the week at/near 93s.
Next week’s response in the Upper Cluster, 93.90s-92.60s, will be of focus early in the week. IF this cluster holds as support, price discovery potential higher toward Major Structural Resistance overhead, 97s. IF this cluster holds as resistance, price discovery lower (filling in last week’s distribution) toward 91s/89s.
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Our weekly TPO profile graphics for 19Apr.
Plotted are Structural Support (blue), Resistance (red), and Points of Control (green).
The graphs show the monthly timeframe sellside directional auction within April
(left) and the last week’s continuation lower toward the Major Nov-Dec 2012
Structural Support at/near 86s.
Our weekly statistical study plotting the key reference levels/weekly close for 19Apr, projected levels and inferential analysis for week ending 26Apr.
The market began the week with continued balance, 88s-89.50s, within the context of the larger Balance Area, 86s-89.50s, following the Stopping Point at/near 86s (Major Structural Support). The multi-day failure of the sellside to drive the market below 88s was a key clue to the pending inventory imbalance developing.
Following the coil at the Balance Area High early in the week, the market encountered the buyside directional phase midweek. As the monthly graphic above illustrates, the near term low usage area resided above the 89.50s, implying the buyside auction was likely to continue toward the Overhead Supply Cluster, 92s-94.50s, as the market filled in that low usage. This Structural fact superseded Statistical Projections for the week, and the market did rally toward the Overhead Cluster’s POC at/near 93.50s, before achieving the Weekly Stopping Point at 94s, closing the week at/near 93s.
These studies informed our subscribers of the the Structural Development of a Stopping Point at a Major Structural Support, 86s, and the implications of a breakout at either edge of the Subsequent Balance Area, 86-89.50s that developed. This information provided quantifiable, potential destinations and strategy (range positions early week, long positions mid to late week) in congruence with the market structure.
A holistic view based on the market generated data and probability logic.
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