Energy Prices On The Verge Of A Major Meltdown

On May 31, 2012 by TradingDesk

Energy prices are on the verge of a major meltdown this week, having already dropped a dime since Tuesday morning. Europe is imploding, and the weaker Euro/stronger US Dollar is driving several commodities to their lowest levels of the year. RBOB and HO face critical tests of support in the low $2.70s this week, and the price reaction from that level may determine a great deal as we head into June. Technical and fundamental data continue to suggest that lower prices are coming.

Perhaps the most notable action in global markets today is that both US and German bonds have hit record low yields, demonstrating the fear that is beginning to grip many traders and investors. With the amount of leverage being used to trade, if this trend continues, we may see much lower prices in a hurry as hot money heads for calmer waters.

¬†CLICK HERE for a PDF of this morning’s charts



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