Oil Heads For Higher Ground on Fed Day
Crude Oil (CLF8) took a run above 90 with the bulls for a period today before settling back at 89.22 – still ahead 1.5% on the day. You can make a case either way as to whether the 25 basis point Fed rate cut had anything to do with the rally, but the bottom line is that Crude is back in positive territory.
The chart suggests that we're in a bit of a consolidation over the last few days. Since the beginning of the month, Crude has been bouncing between 85 and 91, and the market remains below both moving averages. If this is a move to the downside for the longer term, the next level of support is at 84, followed by stronger support at 78. To the upside, the market never managed to get above the 100 level a few weeks ago, marking the 99 area as resistance on that end.
Of course, the biggest news of the day was indeed the Fed rate cut. S&P futures reacted negatively with a close to the downside of 40 points (1478), setting up an interesting ride for the rest of the week with retail sales, initial claims, CPI, and PPI all still on tap.
Mike Tosaw, Director of Education
