United States Oil (USO) settles with a loss as Fed minutes raise economic worries
U.S. oil futures settled slightly lower Wednesday, giving up earlier gains, as minutes from the Federal Reserve’s September meeting raised worries about the economy and government data revealed a fourth straight rise in domestic crude supplies.
Prices had moved higher earlier in the trading session on the back of optimism over U.S.-China trade negotiations, and as the U.S. government also reported a fall in petroleum-product stocks.
A news report said Beijing was open to a limited trade deal, but analysts noted that sentiment around the negotiations, with high-level talks set to resume in Washington on Thursday, has tended to swing sharply between optimism and negativity.
West Texas Intermediate crude for November delivery CLX19, -0.11% on the New York Mercantile Exchange fell by 4 cents, or 0.08%, to settle at $52.59 a barrel on the New York Mercantile Exchange after trading as high as $53.74 during the session. December Brent crude BRNZ19, -0.12% added 8 cents, or 0.1%, to end at $58.32 a barrel on ICE Futures Europe.
Prices for the U.S. benchmark turned lower right around the release of the minutes from the Federal Open Market Committee’s September meeting. The minutes showed that Fed officials were more worried about the U.S. economy. There was even talk about possible recession, with several Fed officials noting that the probability of a recession “had increased notably in recent months.”
The minutes “reflected rising concern for global growth and suggested that geopolitical threats, uncertainties in business outlook and sustained weak investments could damp[en] income and consumption,”Manish Raj, chief financial officer at Velandera Energy Partners, told MarketWatch. “Concern for slowing consumption weighed in on already weak market sentiments in light of [the] EIA reported crude inventory build-up.”
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 11.50.
The projected upper bound is: 11.90.
The projected lower bound is: 10.03.
The projected closing price is: 10.97.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 48.3092. This is not an overbought or oversold reading. The last signal was a buy 3 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 39.23. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 82 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -63. This is not a topping or bottoming area. The last signal was a buy 2 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 10 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed up 0.100 at 10.990. Volume was 20% below average (neutral) and Bollinger Bands were 28% wider than normal.
Open High Low Close Volume___
11.180 11.210 10.930 10.990 23,995,416
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 11.19 11.55 11.82
Volatility: 22 50 40
Volume: 25,333,058 31,552,228 26,780,942
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
UNTD ST OIL FUND is currently 7.0% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of USO (mildly bearish). Our trend forecasting oscillators are currently bearish on USO and have had this outlook for the last 6 periods.
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