Weekend News 23Feb

As noted in last week’s review, here, the response at the structural low, 95s, was in fact key to this week’s auction. The market auctioned up this week toward the Avg Weekly Range High area, 97.10s, here where the market encountered supply driving the market down through the trade cluster to the key structural support, 95s. 

The market broke down through that support, as price discovery drove the market back into the lowest Jan trade cluster, 92.40s-94.40s, as inferred last week. The market achieved a stopping point at/near 92.45s, closing at/near 93.10s.  IF the 92.50s hold as support, then expectation for balance from 92.50s-95.00/60s before the next directional phase. IF 92.50s fail, price discovery lower to the major structural support, 91.50s. 


Source: EIA (Feb 2013)

Graphics

Central Banks

Geopolitics

  • G20 Credibility At Risk, Sayeth Asmussen. (Reuters)
  • EIA Estimates Syrian Oil Production Decline/Shut-Ins As Of Nov 2012. (Platts)
  • US (POTUS) Deploys Troops To Niger. (RT)
  • US Wants Iran To Stop Using Euro, ECB Under Pressure. (RT)

Supply/Demand & Markets 

WTI Crude: Next Week’s Levels, Now. 22Feb

Our weekly TPO profile graphics for 15Feb.
The graphs show the Jan distribution
rally phase followed by the Feb balance
phase from 95s-98s, clearly identifying
the longer term shift.

Plotted are Support (blue), Resistance (red),
and Points of Control (green) indicating monthly & weekly
levels of significance based on the market structure, not opinion.

Our weekly statistical study plotting the key reference levels/weekly close for 15Feb, and projected levels for week ending 22Feb. 

This graph shows our weekly statistical expectations for 18Feb-22Feb: (94.95, 94.67, 94.40 as potential support levels) as well as inferential analysis for the week. 

Result?… 

The market auctioned within the Feb micro-cluster, 95s-97s, early in the week, developing a Buy Spike structure into Tue’s auction close. This Spike’s High, 96.70s, was defended as resistance, beginning a major sellside auction which was confirmed upon the market breaking down below the key structural support, 95s. Selling accelerated into the lower Jan cluster, 94.40s-92.40s, visible on the monthly TPO graph. Price discovery continued lower ultimately achieving a stopping point at/near the structural support, 92.45s, as noted on the graph. The market closed at/near the 93.10s well beyond the weekly 2nd Std Dev Low expectation, 94.40s. 

The context of a failed Buy Spike and structural breakdown on Tue, informed the participant of the asymmetric sellside opportunity and likely destinations of such an outcome. Knowledge of these structural & statistical levels of significance (95s, 94.40s, 93.10s, 92.40s) provided clarity into the appropriate strategy (short positions) and potential destinations in congruence with the market structure.

These graphs provide a holistic view based on the market generated data, not opinion, to inform the participant of structural  levels of significance, statistically probable destinations, and the resting supply/demand clusters of the auction. All were required this week to maximize trade efficiency and minimize asymmetric risk. 
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