Market Update 16/11:S&P and Oil

Oil has been trading very consistently to what was anticipated following its major fall from the 91.2-92$ level.It is now moving close to the upper band of a downward moving channel and just below the 61.8% fibo support.We expect to see downward momentum towards the 83-84.5$ levels.If not,a breaking of the channel could signify a move towards the 88.5$ support.

S&P is experiencing an ongoing correction along with all major indices.We would like to highlight here the breaking of a macro-bull trendline that helped intensify this fall,as well as the overall movement within the major upward channel formed after the 2009 low.Also,worth noticing is the wedge formation that was recently broken,packing more potential for downward pressure.

Oil Tumbles almost 5%

Oil(WTI) ends the day with a major tumble of almost 5%,as the Dow suffers its worst day in 2012.So,here is a quick update in oil.Take into account the downward channel that is clearly formed,packing enough momentum to bring the price in the 82.1-85.7$ range as predicted.Notably RSI is still at a healthy 38.5,allowing for more downward movement to develop.The “twin” fibo levels of 78.6% in the second chart presented here,are likely to be tested soon and provide temporary support.We will have to wait for significant developments in the geopolitical arena if we are to see a major rise in oil prices anytime soon,since the recession plaguing Europe and the prolonged weakness in the American economy are catching up with the markets and their “on-QE-steroids” mentality.Now that the elections in US are over,the military option in the issues of Syria and Iran is coming back with a rage,and in our view,will constitute the main factor behind moves in the oil price.