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Crude Oil Wrap Up


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December Crude Oil continued its breakdown below trendline support on Thursday, November 3, 2016, trading down to 44.37 as traders continue to trade out of long positions. Liquidation continues to push prices down as traders belief in the OPEC agreement continues to decline. OPEC has had a difficult time getting its members to actually agree to real cuts in their individual production after agreeing in Algiers as a group to cut production. We all know by now that Iran, Libya and Nigeria were given exemptions at the Algiers meeting. Iraq and to a lesser extent Venezuela have been balking at cutting their production since the meeting in Algiers ended. Iran has been very supportive of the agreement for obvious reasons. Saudi Arabia was able to complete it $17.5 billion auction on the rally in crude oil and at the moment isnt desperate for cash. The odds for a freeze/ cut going through at the OPEC meeting at the end of November are low. OPEC hasnt attempted to come up with any bullish stories recently. Producers put hedges on during the rally, so they have protections in place in case of a major downturn. The latest EIA report showed a record build of 14.42 million barrels. The supply glut doesnt seem to be going away as many assumed. Demand remains subdued. A breakdown from the Thursday low could lead to a test of the 200 DMA at 43.32. Support is at 43.00, 42.10 and 41.10. Trading above the Thursday high (45.90) could lead to a test of the trendline at 46.38. A close above the trendline could lead to a rebound to 47.35. Resistance is at 48.35 and 49.15.

High 45.90

Low 44.37

Last 44.67

Daily Pivots for 11/4/16:

R2

46.51

R1

45.59

PIVOT

44.98

S1

44.06

S2

43.45


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, November 4 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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