Best of the Week
Most Popular
1. Climate Change Mass Extinction - Birds, Bees and Bugs: Going Going Gone - Richard_Mills
2.A Purrrfect Gold Price Setup! - Peter_Degraaf
3.Who Finances America's Borrowing? Recession Indicator for Independent Thinkers Part 2 - F_F_Wiley
4.America’s One-sided Domestic Financial War - Raymond_Matison
5.Gold Price Summer Doldrums - Zeal_LLC
6.Two Key Events Will Unleash Gold - Jim_Willie_CB
7.Billionaire Schools Teacher in NAFTA Trade Talks - Richard_Mills
8.Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - Jeb_Handwerger
9.Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - Troy_Bombardia
10.G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - Chris_Vermeulen
Last 7 days
The Death of the US Real Estate Dream - 22nd Jul 18
China is Now Officially at War With the US and Japan - 22nd Jul 18
You Buy the Fear in Gold - 22nd Jul 18
Trumponomics Stock Market 2018 - The Manchurian President (1/2) - 21st Jul 18
The Death of Japan's Real Estate Dream - 21st Jul 18
SMIGGLE Amazing Mega Shopping Haul, Pencil Cases, Smigglets and Giant Back Packs! - 21st Jul 18
Cayton Bay Beach Caravan Park Holiday - What's it Like? - 21st Jul 18
Gold Stocks Investment Wanes - 20th Jul 18
Diversifying Your Stock Investing Strategies is Smart Investing - 20th Jul 18
Custom Global Stock Market Indexes May Be Sounding Alarms - 20th Jul 18
S&P 500 Just 2% Below Record High, But There's More Stock Market Uncertainty - 19th Jul 18
Stock Market Technical Picture - 19th Jul 18
Gold Market Signal vs. Noise - 19th Jul 18
Don’t Get Too Bullish on Gold - 19th Jul 18
Bitcoin Price Rallies to Upper Channel – What Next? - 19th Jul 18
Trump Manchurian President Embarrasses Putin By Farcically Blowing his Russian Agent Cover - 19th Jul 18
The Fonzie–Ponzi Theory of Government Debt: An Update - 19th Jul 18
Will the Fed’s Interest Rate Tightening Trigger Another Financial Crisis? - 18th Jul 18
Stock Market Investor “Buy the Dip” Mentality is Still Strong, Which is Bullish for Stocks - 18th Jul 18
Stock Market Longer-Term Charts Show Incredible Potential - 18th Jul 18
A Better Yield Curve for Predicting the Stock Market is Bullish - 18th Jul 18
U.S. Stock Market Cycles Update - 18th Jul 18
Cayton Bay Hoseasons Caravan Park Holiday Summer 2018 Review - 18th Jul 18
What Did Crude Oil - Platinum Link Tell Us Last Week? - 17th Jul 18
Gold And The Elusive Chase For Profits - 17th Jul 18
Crude Oil May Not Find Support Above $60 This Time - 17th Jul 18
How Crazy It Is to Short Gold with RSI Close to 30 - 16th Jul 18
Markets Pay Attention Moment - China’s Bubble Economy Ripe for Bursting - 16th Jul 18
Stock Market Uptrend Continues, But... - 16th Jul 18
Emerging Markets Could Be Starting A Relief Rally - 16th Jul 18
(Only) a Near-term Stock Market Top? - 16th Jul 18
Trump Fee-Fi-Foe-Fum Declares European Union America's Enemy! - 16th Jul 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

Crude Oil Underpinned Despite Weakness as the Only Alternative to Nuclear Power

Commodities / Crude Oil Mar 18, 2011 - 08:44 AM GMT

By: Seven_Days_Ahead

Commodities

Best Financial Markets Analysis ArticleThe recent rally in oil markets, driven by unrest in the Arab world, has paused in the aftermath of the Japanese natural disaster and possible and impending nuclear disaster. Traders are trying to assess the implications for energy demand as the world’s 3rd largest economy looks set to endure a recession.


The Technical Trader’s view:

MONTHLY  CHART

The market has tried to break the 61.8% Fibonacci resistance, but so far has failed.

Look closer.

WEEKLY CHART
The fall back through the Fibonacci has been brutally fast.

Note well though the succession of support beneath the market 93.98- 94.89.

Look closer still.

DAILY CHART

The market has not yet managed to test the important support – held up as it has been by the Fibonacci support at 97.

The market looks well-support at these levels and just beneath them.

 

The Macro Trader’s view:
The recent rally in oil markets, driven by unrest in the Arab world, has paused in the aftermath of the Japanese natural disaster and possible and impending nuclear disaster. Traders are trying to assess the implications for energy demand as the world’s 3rd largest economy looks set to endure a recession.

An initial reaction might have been that oil prices would continue to push higher. The unrest in Libya has turned to virtual civil war, meaning that her exports of oil have dried up, and although OPEC has pledged to make good the shortfall, it is by no means clear that the unrest will not spread to other Arab oil exporting states.
Bahrain a regional financial hub and base for US forces, has had to invite in troops from neighbouring states to help suppress a popular uprising in a country that many considered more tolerant than most of her neighbours.

Moreover, as Countries around the world review their nuclear energy policies following the still evolving drama in Japan with:

  • China halting further construction of nuclear plant,
  • Germany closing down seven older nuclear power stations, and
  • an EU energy official saying the EU should consider a nuclear free energy policy,

the longer-term outlook for oil prices must surely be higher. Although governments are looking at other “green” alternatives, nuclear energy is the only viable alternative deployable on a large scale, to oil-fired electricity generation.

So, while the immediate outlook for Japan’s economic prospects is negative, traders will soon look beyond that stage if popular opinion forces governments around the world to drop nuclear power as a main stream energy generating source.

And while the oil price currently marks time on growth fears, the longer term issue is what other means of energy generation is available to allow western governments to move away from their dependence on oil, which many believe won’t be able to match demand as emerging economies rush to join the developed world.

We judge the oil price is in a long-term bull market and new all-time highs are likely. This was our view before the crisis in Japan struck, since China and India are still growing and so too is their demand for energy, now as the world holds its breath and prays for a miracle at Japan’s stricken nuclear facilities, the current oil price may soon look cheap.

Mark Sturdy
John Lewis

Seven Days Ahead
Be sure to sign up for and receive these articles automatically at Market Updates

Mark Sturdy, John Lewis & Philip Allwright, write exclusively for Seven Days Ahead a regulated financial advisor selling professional-level techni44cal and macro analysis and high-performing trade recommendations with detailed risk control for banks, hedge funds, and expert private investors around the world. Check out our subscriptions.

© 2011 Copyright Seven Days Ahead - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Seven Days Ahead Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules