Lars Christensen is one of the founding members of the Market Monetarism school of economic thought, having coined the term himself. Market Monetarists advocate that central banks target nominal GDP, instead of inflation, in order to achieve more responsive monetary policy and more stable economic growth.
Crude falls below $50
June Light Crude fell sharply last week, ending below $50/barrel in response to rising US inventories.
Respect of the lower trend channel would suggest that this is a secondary movement and the primary up-trend is intact. Breach of the lower channel would warn that the primary trend is weakening.
Crude stalls
December Light Crude retreated below support at $50/barrel, suggesting another test of primary support at $42/barrel.
Respect of primary support would suggest further ranging between $42 and $52/barrel. Breach of support, which seemed so unlikely only two weeks ago, is now a possibility and would warn of another test of the January trough at $35/barrel.
Crude: Another advance likely
Nymex December Light Crude is consolidating above the new support level at $50/barrel. Respect is likely and would confirm the primary up-trend. Target for an advance is $56/barrel*.
* Target: 50 + ( 50 – 44 ) = 56
Crude tests key level at $50
December Light Crude is retracing to test new support at $50/barrel after the recent breakout.
If we look at the longer term weekly chart we can see how important this level is. Respect of $50 would confirm the primary up-trend. There is still doubt that support will hold — and that OPEC will be able to craft an agreement that will satisfy members while restricting supply. Failure would suggest that crude will revert to ranging between $40 and $50.
OPEC deal a fake
OPEC announced an agreement to cut production — to between 32.5 million and 33 million barrels per day from current levels of 33.2 million barrels — without agreement as to which members will bear the brunt of the production cuts. FGE Chairman Fereidun Fesharaki calls this “a fake deal” and explains that OPEC could not afford to come away from Algiers empty-handed.
http://video.cnbc.com/gallery/?video=3000555509
Nymex Light Crude rallied to $48/barrel and looks set to test resistance at $50. Breakout above $50 would signal a primary up-trend but respect is more likely, once the market gets past the headlines, and would suggest further consolidation between $40 and $50.
Crude testing $40
Light Crude (September contract) is testing medium-term support at $40/barrel. Breach of support would signal a test of primary support at $33 to $34. Respect of support, on the other hand, would indicate another test of resistance at $50. And breakout above $50 would signal a primary up-trend.
The long tail and strong volume at $40 suggest that support may hold. But I wouldn’t bet the house on it. Especially when gasoline inventories have surged, the US rig count is rising …..and demand is set to fall.
Gasoline stocks rise
More from Tyler Durden:
As the chart below shows, gasoline stocks rose 0.5 million bbls last week to 241Mm bbl and is now 11.8% higher than last year.
Source: Oil Crashes To $41 Handle After Surprise Inventory Build, Production Rise | Zero Hedge
Oil Crashes To $41…… | Zero Hedge
Tyler Durden suggests that crude oil prices will fall in the second half of 2016:
Tracking last year’s pump-and-dump of hope perfectly.
As demand is set to tumble…
Source: Oil Crashes To $41 Handle After Surprise Inventory Build, Production Rise | Zero Hedge
US rig count rises
The recent peak in crude prices coincides with the bottom for the US oil rig count (discussed Monday).
