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Crude Oil Wrap Up


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December Crude Oil tumbled on Tuesday, October 25, 2016, as traders expectations of an OPEC production freeze/ cut takes a breather. The constant rumblings from Iraq and Russia are starting to affect the bullish mindset of traders. With an early rally in Crude Oil failing to hold, price broke below the $50 mark and stayed there as traders waited for the API report to come out and show a build in inventories. Traders looking for a build in inventories got more than they expected (+2 million barrels), as inventories increased by 4.8 million barrels. Cushing, Oklahoma inventories, dropped by 2.3 million barrels, more than the expected 500,000 barrels. Gasoline inventories increased by 1.7 million barrels, much more than the drawdown of 1 million barrels expected. Distillates declined by 940,000 barrels. The builds in overall inventories and gasoline pressured crude oil prices and took it to new lows and below the 49.36 t level. Crude oil ended the day just off the low (49.27) at 49.30. The EIA report is on Wednesday and confirmation of the API report could send price down to test trendline support now at 48.73. A breakout below the trendline could lead to a test of the 50 DMA at 47.51. Resistance is at 49.86 (21 DMA), and 50.00. Trendline resistance is at 50.60.

High 50.93

Low 49.27

Last 49.30

Daily Pivots for 10/26/16:

R2

51.49

R1

50.40

PIVOT

49.83

S1

48.74

S2

48.17


If you are interested in a Managed Futures program for Crude Oil, check out this offering from Walsh Trading:

Walsh Asset Management Introduces Bluenose Capital

For those interested I hold a weekly livestock webinar on Friday, October 21 at 2:30pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon signup.

Sign Up Now

Ben DiCostanzo

Senior Market Strategist

Walsh Trading, Inc.

Direct: 312.957.4163

888.391.7894

Fax: 312.256.0109

bdicostanzo@walshtrading.com

www.walshtrading.com

RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.



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About the author


Ben DiCostanzo
Senior Market Strategist
Walsh Trading

I began my career in the Securities industry working as a runner on the floor of the New York Stock Exchange while I attended Pace University. I then started working for Salomon Brothers in their Government Bond Trading arena. After graduating from Pace University with a degree in Accounting, I transferred to Chicago and became a member of the Chicago Mercantile Exchange utilizing my experience to execute trades and manage risk for institutional clients as a broker for Salomon Brothers on the trading floor. I then embarked to trade for my own account in the stock indices pits as a local before moving off the floor to aid and assist individual clients in their trading endeavors. I now work at Walsh Trading holding a series 3 broker’s license whose duties include being the firm’s Chief Market technician.

I understand that every client's needs are different, and I pride myself in tailoring my service to each client's unique circumstances and needs. Individual client experience, risk tolerance, and capital all play a role in how I approach the markets. I am involved in all markets using technical analysis to find opportunities. My approach is driven by the principles of capital preservation.

My trading philosophy is that if you can recognize and manage the risk, you have a better chance to be successful in trading. I advise clients to always use stops as money management in my opinion is the most important ingredient in trading commodities.

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