This week WTI traded a Three Black Crows candlestick formation Wed thru Fri, after trading a head-fake bull trap on Tue. Price action suggests more weakness in the week ahead, but possibly not as aggressive as this week, 7200 should provide some support. If this level is broken, then ~6900 represents next significant support. Care should be take on the bearish side short-term though. The USDX actually closed marginally lower on Fri, which is not entirely supportive of the bearish view for equities and commodities. Technically, while there may be room for more downside on WTI, the Percent R oscillator is indicating an oversold condition, suggesting a pause/reversal near-term is likely. Trader commentary noted that equities volume last week did rise relatively with the fall in prices, but not enough to suggest a massive correction is underway - yet.
A return of 'normal' winter weather to the US NE has lifted HH from 540 support through recent 580 resistance. Another large draw on inventory levels last week has placed stocks well back within the five-year range. Seasonally, the market is beyond the midpoint of the 2009/10 winter season, so, barring aggressive extended cold weather, any price rises should be transitory, with traders/analysts estimating what stock levels will be at the end of this heating season - providing either a bearish or bullish skew, depending on stock forecasts. 600 should represent moderate to significant near-term price resistance.
