US Equity Prices Moving Fractionally Higher

On May 21, 2012 by TradingDesk

US Equity prices are moving fractionally higher, following their worst weekly performance of the year. Pledges from the G8 meeting this weekend has brought renewed optimism that the European crisis can be solved, and promises from Chinese officials to stimulate their slowing economy are helping to push values into the green.

With little economic news on the schedule, energy prices are taking their cue from stocks, and trying to bounce from the lowest levels in months. Technically, all energy futures are severely over-sold, making us due to see a bounce. The mid $2.90 range will be key resistance to the upside for both RBOB and HO prices. If products fail to move through this range this week, expect lower prices in the near future as the overall outlook remains bearish.

The CFTC commitment of trader’s report from Friday shows that speculative long interest has been cut back sharply in the energy markets, but that a significant volume of open interest remains, particularly in gasoline futures. The movement of this money over the next several weeks will play a significant role in determining whether energy prices can bounce from recent lows, or if we’ll head to the $2.50 range like we did last year.

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