EuroUSD - Nifty50 & WTI Crude

WTI Crude Weekly

I expect Crude to make a bottom of 30 against the USD and then reverse and close above 35 for the week. If that happens i will consider crude to have bottomed out.

Deeper Correction in Dow, Post FED Meeting on 15th Sept & After Effects

I usually do not like to make dramatic statements and for the DJIA which corrected heavily during end of August I had only taken 16,000 as a correction point. If the coming week with the FED meeting approaching, the DJIA close is below 16,000, i believe there would be a sharp sell off again towards 13,820. In short September should be a happening month.

Effect on Sensex: Usually a 1000 point drop on the Dow means a 2000 point drop on Sensex. In all likelihood another sell off could happen targeting 21000 on the Sensex.

Effect on USD/INR: The Indian Rupee would touch 70, which would be the top for all times to come.

Effect on EUR/USD: Euro would move ahead of its previous recent high and target 1.1920.

WTI Crude: I don't expect crude to be a beneficiary of all this chaos created by the Dow however will be able to say next week after FED meeting.

USD/CHF & USD/JPY: I find these both counters very good sells at current levels.

WTI Chart-Possible Bottom Formation

I expect WTI Crude to bottom out at around 32 to 36 range.

WTI Crude

WTI Crude Buy Signal

Trade Setup for WTI Crude

A great trade opportunity is unfolding in Crude in the coming weeks. Only a close below the 20 MA will be considered as a failure of the setup. The chances of success are 90%.

WTI Crude

WTI Crude, Gold, Silver - End of March 2015

WTI Crude and USDX

WTI Crude

WTI CRUDE - DAILY CHART

Below is my view on crude. I still believe crude will try the bottom once again. The fact that crude has also gone through the 50 MA (blue) makes test of previous low open. Crude only needs to close below the 50 MA to give a second confirmation in addition to the triple top.

WTI Crude

WTI Crude Analysis - End of Jan 2015

This week is US Unemployment data and Non Farm Payrolls. Main focus is going to be on the Friday data. I expect crude to hold previous low and move up towards 55 USD as indicated in the chart. For the coming week the low could be 46.50. The chart has a typo. Its not 44.50 but 46.50.

WTI Crude - Possible wave count

WTI Crude Oil - US dollar Index

WTI Crude & USDX

Crude has been a topic of discussion for some time with many countries particularly Oil producing ones feeling the pain of the low price. If Crude stays at around 40 levels till the end of the year or more, it could result in serious trouble for Russia, Iran, and a few others. Most analysis has been with reference to Saudi wanting to take on Russia in the Oil Market and Iran which wants to be the regional power in the Middle East which is not to the liking of the Saudis.

The problem with Crude staying at low prices upsets the budget of most oil producing countries which need crude to be at around 80 plus USD to be able to balance their budgets. Current prices would make huge holes in their budget leaving them with big deficits.

I feel Saudi and US are being unfairly targeted because markets drive prices. Since 2008 Crude has made an attempt to move back to 120 plus USD region but failed. At some point profit taking was likely to happen.

Saudis would not like to keep the prices at these or lower levels for long, so is the case also with the US. US is comfortable for the next few months due to storing oil and gas, but US itself needs oil prices to be above 50 USD to support its Shale gas and oil Industry which eventually will get effected if prices stay at these prices.

There is also another line of thought which believes the Saudis are squeezing out competition including the US Shale Oil and Gas companies.

Whatever the case, the current situation is most serious because if crude stays at these prices till around the end of the year, we could have unwinding of positions on other markets. Oil Producing countries would have to unwind positions in Real Estate and Stocks to meet their spending's. This could lead the stock markets to crash globally.

Have attached Charts of USDX (US Dollar Index and Crude). Maybe we are near the bottom. USDX is in overbought territory as can be seen from the RSI. If the price of 92 in US Dollar Index holds we can see some correction in crude possibly to above 52.

WTI Crude Chart 4H

WTI Crude Chart

WTI Crude Analysis - Weekly Chart

I will also upload the Monthly chart later during the day. For now the whole world is focused on crude prices and how crude would impact oil producing countries. Even Saudi Arabia needs a price of 86 USD approximately to be able to meet its budget requirements failing which they have to find ways to meet budget deficits. Russia gets 45% of its GDP from Crude and in the case of Nigeria its as high as 70%.

To that extent if crude continues to stay at current levels till around June when the next OPEC meeting will take place, it could be bad for stock markets as unwinding of long positions could take place for a quick correction in the stock markets around May-June this year.