CLN12 - Update for June 8th, 2012

Price analysis for the week of June 8th, 2012:

Market Overview: Amid the turmoil that surrounds Europe and its debt crisis, crude oil prices have dropped materially through this seasonally weak period. It is interesting to see that we are basically testing last fall's lows (74.95) which happened to be right in the mouth of the last European debt crisis. The various referendums/elections etc. seem to point to a climax somewhere near the first week or two of July and that is when I expect to see both the weekly uptrend line tested in earnest and a climax to the selling. Having said that, there is a nice little bottom on the daily charts that is trying to form. Should 87.03 be broken and the market can stay above that level for a few hours, I might be inclined to see a rally back into the daily 50% range (96.35). That is a big IF! For the time being, I am still looking for lower lows and the hourly chart seems to be setting up for a move into the high 79 area in the coming sessions.

Trading Strategy (1 week): As stated previously, 'we have officially hit our target zone for this correction. The target zone is based on the 1 year and 2 year 50% levels and currently sits between $89.445 and $92.75. It should not surprise us then to see that the market has basically consolidated around these levels for the past few trading sessions.'

My expectation for this coming week is a test of either the upper end of our trading range (87.03) and/or the lower end (81.21). A break of either should dictate trade for the remainder of the week. Higher and we can start thinking about the daily 50% level (96.35). A break lower and we ought to still be considering the gap to be filled (79.01) and ultimately the contract low (77.40) to be tested...

That's all for this post,
Brian Beamish FCSI
The Canadian Rational Investor
the_rational_investor@yahoo.com
http://www.therationalinvestor.ca 
http://crisdaytrading.blogspot.ca/