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Crude Oil Wrap Up


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The EIA report came out on Crude Oil on Thursday, January 5, 2017. Overall crude oil inventories decreased 7.051million barrels on expectations of a decrease of 2 million barrels while Cushing, Oklahoma inventories increased by a larger than expected 1.074 million barrels. Traders were looking for an increase of 200,000 barrels. Gasoline inventories rose by 8.307 million barrels; expectations were for an increase of 1million barrels. Distillates inventories increased by 10.051 million barrels; traders were looking for a decline of 800,000 barrels. The report sent Crude Oil to the low of the day at 52.79. Crude Oil then rebounded on reports that Saudi Arabia has cut its output by 486,000 barrels. If this is true their production would be at 10.051 million barrels, which puts them in compliance with their production cut obligation. Crude tested support at the 21 DMA this week and it has contained the selling pressure. If Crude Oil can trade above 53.85, it can test resistance at 54.51 and then 55.24. A breakdown below 53.35 could lead to another test of the 21 DMA (52.66), and then 51.47.

High 54.12

Low 52.79

Last 53.76

Daily Pivots for 1/6/17:

R2

54.89

R1

54.32

PIVOT

53.56

S1

52.99

S2

52.23


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, January 13 at 3:00 pm. 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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